In a significant shift within South Africa’s energy sector, 3 major fuel companies, TotalEnergies, Shell, and BPSA have decided to exit the country’s market.
TotalEnergies, the biggest oil corporation in Europe, has decided to renounce its permit to explore for gas and oil off the coast of South Africa. The corporation challenges the economics of the large oil deposits discovered in the region, despite having invested significant money, given South Africa’s low demand for fossil fuels, according to the business-focused publication BusinessTech.
Rather, TotalEnergies plans to prioritize operations along Namibia’s coast, where they should be more economical and suitable for selling to foreign markets. “The company’s decision is due to problems with local authorities and policymakers,” the energy expert, Anton Eberhard suggested.
BusinessTech also states that it was anticipated that Shell would sell its downstream business in South Africa, refining, retail, and transportation as part of its plan to divest non-core assets. Shell explained that the decision was motivated only by business factors, in contrast to previous speculations.
The business hub further stated that BPSA also recently sold their jet fuel business and its share in the South African Petroleum Refinery (SAPREF), citing reasons that are similar to the above-mentioned fuel company, Shell. Furthermore, the fuel company has decided to stop participating in any aviation-related activity in South Africa.
“Some experts have suggested that the reasons for their exits in statements are ‘polite speak’ and that the main reason is South Africa’s economy’s poor performance over the past decade, with growth averaging only 1.1% from 2000 to 2023,” the publication added.
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