UAE company ADNOC is bidding $1 billion for Shell's downstream operations.
Image: Shell
Abu Dhabi-based ADNOC Distribution has agreed to buy Shell Downstream South Africa, which will see it take ownership of one of the country’s largest fuel retail businesses.
If the deal goes through, it will wrap up Shell’s planned exit from South Africa’s downstream fuels market.
Announcing the transaction, ADNOC Distribution said the R16 billion ($1 billion at R16.25) acquisition includes about 580 service stations, commercial fuels, lubricants, aviation and marine fuels businesses, as well as around 360 convenience stores.
Shell sold about 3.5 billion litres of fuel during 2025, making it one of South Africa’s largest fuel retailers, the UAE government-owned company said in a statement.
ADNOC said the Shell brand would continue to be used at retail service stations and for lubricants under a licensing agreement.
It also committed to selling a 28% stake in the business to a South African empowerment partner and an employee share ownership plan following completion of the transaction.
“The company will seek to appoint a partner with a deep understanding of the South African sector, its regulatory environment and local operating requirements, including alignment with the objectives of the country’s Broad-Based Black Economic Empowerment legislation.”
Chief executive Bader Saeed Al Lamki reportedly said the acquisition is “a transformative step” in ADNOC Distribution’s international expansion, saying South Africa’s well-developed transport infrastructure and growing driving-age population supported the long-term outlook for fuel demand.
South Africa represents the fourth country where ADNOC Distribution would operate and follows its acquisition of a 50% stake in TotalEnergies Marketing Egypt in 2023 and the 2018 launch of its retail fuel stations in Saudi Arabia.
South Africa represents the fourth country where ADNOC Distribution will operate.
Image: ADNOC
The transaction concludes a divestment process launched by Shell in 2024 as part of a global portfolio review aimed at focusing on higher-return businesses, Reuters previously reported.
The sale process stretched over almost two years, with commodity trader Gunvor previously emerging as a preferred bidder before negotiations fell through and ADNOC Distribution ultimately secured the deal.
Shell finalised the sale of its 50% stake in the Sapref refinery to the state-owned Central Energy Fund in May 2024 for a nominal R1, following the refinery’s indefinite pause in 2022.
The acquisition is the latest change in ownership across South Africa’s downstream fuel sector.
In 2018, Glencore acquired a 75% stake in Chevron’s South African business (now known as Astron Energy), which continued to use the Caltex brand under a licensing agreement. Astron Energy has been progressively rebranding the former Caltex service stations to its own corporate name.
Meanwhile, Engen’s ownership changed when Vivo Energy acquired PETRONAS’ majority stake, while retaining the Engen brand and operations.
For motorists, little is expected to change in the short term. ADNOC said the Shell retail network and lubricants business would continue operating under the Shell brand, while the company integrates the business into its growing international portfolio.
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