Aramco, Trafigura said to compete for Shell SA assets

Saudi Aramco, the Abu Dhabi National Oil Company and commodities trader Trafigura are among suitors competing to buy Shell’s service stations in South Africa, according to people familiar with the matter.

The assets have also attracted initial interest from South Africa’s Central Energy Fund, which owns PetroSA, as well as Sasol and Oman’s OQ Trading, they said. A winner could be picked by the end of the year, though it may also slip into 2025, the sources - who asked not to be named since the information is private - said.

Shell may seek to raise nearly US$1 billion from the sale of its downstream unit in South Africa, some of the people said. The divestment includes trading and fuel supply businesses, the company said in May. It has a network of 600 service stations across the country, according to its website.

Shell is working with Rothschild & Co on the sale, according to the sources. The list of bidders is likely to be shortened over the next few weeks, and binding offers made by December, they added. Shell said it doesn’t comment on divestment activities and Rothschild declined to comment.

Talks with Shell are continuing, and some of the bidders may combine their offers while others may pull out of the race, the people familiar with the plan said. Aramco, Adnoc, Central Energy Fund, OQ Trading, Sasol and Trafigura declined to comment. A representative for PetroSA didn’t immediately respond to queries.



Engen deal

Trafigura and Sasol were also involved in last year’s contest for a controlling stake in Engen, South Africa’s largest petrol station chain. Trader Vitol Group prevailed, with its Vivo Energy Group retail unit combining with Engen to create a service station and storage business operating in more than two dozen countries. It’s part of a wave of traders investing in oil’s downstream businesses as margins from buying and selling cargoes get thinner. Trafigura’s Puma Energy division already operates as one of the biggest retail fuel suppliers in Africa.

Oil producers and trading companies are interested in buying retailers since that provides demand for fuels that they can then supply. Adnoc in the United Arab Emirates (UAE) and Saudi Arabia’s Aramco have been expanding their trading arms as they look to break into new markets.

The two Middle Eastern companies have been active in international deal-making recently, entering into contracts for liquefied natural gas supply and taking stakes or options on export terminals. Adnoc Distribution, which is seeking to hire a chief investment officer to lead its acquisition drive, has expanded into Egypt and wants to grow further in the Middle East and Africa.

Aramco is seeking to expand its refining and petrochemical business, particularly in China. The company also bought fuel distributor Esmax Distribucion SpA in Chile last year and Valvoline Inc’s petroleum business in 2022.