By Lehlohonolo Lehana.
Petroleum group Shell is on the verge of leaving the country in the midst of an acrimonious business fallout with its long-time BEE partner Thebe Investment Corporation.
Shell has operated in the country for 122 years and has been in partnership with Thebe Investment Corporation as its BEE partner for 22 years.
But Thebe’s decision in 2022 to exercise its pull and sell its 28% stake in Shell Downstream South Africa (SDSA) has caused a rift, with Shell accused of undervaluing Thebe’s stake, reported City Press.
It said Thebe valued its portion at $200m (R3.7bn), while Shell saw it as worth even less than the $73m (R1.3bn) shareholders invested when the partnership began.
Fullview understands Shell has told Energy Minister Gwede Mantashe and Trade & Industry Minister Ebrahim Patel of its plan to leave SA.
A source told the publication that the company is expected to announce its plans to staff this week.
Both Shell and Mantashe declined to comment on the reports.
Shell has around 94000 employees in more than 70 countries and territories.
Of these, there are around 4 000 workers in Africa, according to data analysed and collated by Statista.
South Africa is a major market for the company, with over 500 stations across the country.
Shell’s planned exit comes as other major global brands and companies tied to foundational industries in the country raise doubts about the viability and prospects of investment in South Africa.
Most recently, mining giant BHP put a bid for Anglo American – but this deal would have shirked assets in South Africa, which commentators said was an indictment on the country and governance in the country.
BHP responded to the resultant uproar by deploying a senior team, including its chief executive officer, to South Africa to win over government officials, regulators and local shareholders.
It also issued a statement on Thursday emphasising that its proposal was not an indictment of the country.
“The proposed structure does not reflect a view of South Africa as an investment destination and is based on portfolio and commodity considerations,” the company said.
At the end of 2023, CEO of Volkswagen (VW) Passenger Cars, Thomas Schaefer warned that South Africa is becoming an undesirable location for manufacturing cars – especially amid the global shift toward EVs – due to issues such as load-shedding, rising labour costs, and problems with Transnet.