7th Jul 2026 10:07
(Alliance News) - Abu Dhabi National Oil Co on Tuesday confirmed it is buying Shell PLC's South African fuel operations at an enterprise value of USD1 billion.
Shell shares rose 2.8% to 2,993.00 pence on Tuesday morning in London. ADNOC was up 0.8% at AED3.95 in Abu Dhabi.
The UAE state company will acquire the London-based oil major's 580 fuel stations in the country, alongside wholesale fuel, aviation and lubricants operations, through the acquisition of Shell Downstream South Africa.
According to ADNOC, this "marks a major step towards ADNOC Distribution’s ambition to become a global mobility and convenience retailer, while advancing its fuel retail footprint in Africa."
It sees the acquisition raising ADNOC Distribution's earnings per share by 6% in the first full year after completion and generating an internal rate of return above ADNOC's hurdle rate.
"Building on its track record of international expansions, ADNOC Distribution aims to contribute positively to South Africa’s economy. Following completion of the proposed acquisition, a 28% stake in SDSA is expected to be sold on to a local empowerment partner and employee stock option plan," ADNOC added.
Thebe Investment Corp hold 28% of SDSA and Shell owns the rest.
The acquisition by ADNOC is expected to complete in 2027.
ADNOC and Shell will enter a long-term licensing deal, in order to keep Shell branding at South African retail service stations and lubricant businesses.
Bader Saeed Al Lamki, chief executive of ADNOC Distribution, said the purchase "reflects our confidence in South Africa as a high-potential, well-regulated fuel retail sector".
"Shell Downstream South Africa is a respected and financially strong business with deep roots in the local economy, and its values and ambitions align closely with our own," the CEO added.
In 2025, SDSA had fuel volumes of about 3.5 billion litres and operated 360 convenience stores, ADNOC said.
"South Africa represents the fourth country where ADNOC Distribution would operate," the company continued, building on the 50% acquisition of TotalEnergies SE's marketing business in Egypt.
Shell's efforts to divest from South Africa have been in progress since 2024, when the company disclosed that it had decided to exit South Africa as part of its intention to "reshape" its downstream portfolio.
"Over more than 120 years in South Africa, Shell has built an enormous legacy that we can all be proud of," the company said in 2024.
Pam Ntaka, a spokesperson for SDSA, told Alliance News in May 2024 that Shell was in discussions with "several highly credible parties" interested in its retail business in South Africa.
Separately on Tuesday, ADNOC reported that it had entered a 15-year sales and purchase agreement with Japan's INPEX Corp, for the supply of 1 million tonnes per year of liquefied natural gas.
This is the first agreement signed since the launch of an LNG trading business by ADNOC and its investment subsidiary XRG.
It also brings long-term commitments for the Ruwais LNG project, currently under development in Abu Dhabi's Al Ruwais industrial zone, to more than 90% of the project's annual capacity of 9.6 million tonnes. Of the total, 23% is committed to Japanese customers, ADNOC said.
The project's commercial launch is targeted in 2028. ADNOC Gas plans to buy ADNOC's 60% stake in the project for about USD5 billion in 2028.
By Holly Munks, Alliance News reporter
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