Shell mulls sale of most African retail assets

Shell Oil said on Thursday it was considering selling most of its service stations and other downstream assets in 21 African countries, as part of a wider effort to reduce its global refining and marketing exposure.

The decision comes close on the heels of fellow European oil major BP’s announcement it would pull out of five countries in southern Africa, underscoring expectations of lacklustre returns in the region’s fuel retailing business.

“While a number of options are being considered, the preferred outcome is the sale of most businesses concerned,” the company said in a release.

Shell said the review would not include its operations in South Africa, or its exploration and production activities anywhere on the continent, and comes as part of its plan to reduce its global refining and marketing exposure by 15% and 35%, respectively.

Analysts have said oil majors are anticipating better profit margins from exploration and production than from refining and marketing, hard-hit by slower consumer demand growth since the global economic slowdown.

The sale review will include service stations, commercial fuels, lubricants, and other downstream businesses in countries like Egypt, Algeria, Kenya, Ghana, and 17 others. - Reuters