Shell to divest its South Africa’s downstream business

Shell said it will ditch its downstream business in South Africa by divesting its shares in a local company, ending 120 years of operations there.

“Shell has decided to reshape the downstream portfolio and intends to divest our shareholding in Shell Downstream SA (SDSA). Considering SDSA’s illustrious history, this decision was not taken lightly,” the company said.

Economic analysts see in Shell’s divestment an indicator of South Africa’s growing energy woes and degradation of its business climate that thwarts global energy investors.

City Press and the Sunday Times have reported on a simmering dispute between Shell and its partner – the Thebe Investment Corporation – an investment vehicle linked to the ruling ANC by virtual of its majority shareholder, the Batho Batho Trust.

Shell has also been targeted by scant criticism by environmental activists in the country protesting its offshore explorations.