Shell’s SA divesting decision ‘fuelled by company’s global direction’
An economist believes that while Shell’s decision to divest from a local South African downstream unit is fuelled by the company’s global direction, the state of the local economy could also be a factor.
The petroleum company says the decision to exit after more than 120 years in South Africa was made following a comprehensive review of its global businesses.
The move to reshape the downstream portfolio, see it part ways with its majority shareholding in Shell Downstream SA, which includes its service stations.
Dawie Roodt, the chief economist at the Efficient Group, says the move is unlikely to affect workers, as it would be business as usual when a new buyer takes over.
"The filling stations, or garages as we call them in South Africa, in many other countries are being sold off. So they are not really interested in retail business because they are not as profitable as the other kinds of businesses in which Shell is involved in.
"There are many examples of companies that do not have much confidence in South Africa. In the case of Shell, that is not necessarily the case but I think it could be a contributing reason.
“Although Shell will still remain in South Africa, it will be in a reduced capacity, which is really unfortunate."
ALSO READ:
