South Africa’s top court has blocked Shell’s offshore oil exploration, adding another setback as the energy giant prepares to sell its downstream business.
•South Africa’s Constitutional Court has blocked Shell’s offshore oil exploration, overruling a prior decision allowing it to proceed.
•This ruling follows years of legal opposition from local communities and environmental groups, causing delays and reduced investor interest.
•Shell is also preparing to exit South Africa’s fuel retail market by selling its downstream business to Abu Dhabi National Oil Company (ADNOC) for about $1 billion.
•The transaction would give ADNOC control of about 580 fuel stations and 360 convenience stores, accounting for nearly 10% of the retail fuel market.
South Africa’s Constitutional Court has blocked Shell’s offshore oil exploration, dealing a fresh blow to the energy giant after years of legal challenges from affected communities and environmental groups.
The court’s Friday ruling overturns a 2024 decision by the Supreme Court of Appeal that had allowed Shell and its partners to continue exploring for oil and gas off South Africa’s coastline, Reuters reported.
The prolonged legal battles have already delayed offshore exploration and weighed on investor interest in the country’s emerging oil and gas industry.
Shell faces setback as it prepares to exit fuel retail.
The ruling comes as the British oil giant is pursuing another major change to its South African business. The company confirmed in March that it was still seeking to sell its downstream assets in the country, potentially ending more than a century of involvement in South Africa’s petrol retail market.
In April, Shell entered advanced negotiations to sell its downstream business to Abu Dhabi National Oil Company (ADNOC) in a deal reportedly worth about $1 billion.
ADNOC targets Shell’s extensive fuel network
The proposed transaction would give ADNOC Distribution control of Shell Downstream South Africa, including about 580 company- and dealer-owned service stations and roughly 360 convenience stores.
The business also includes Shell’s wholesale fuel operations, aviation and marine fuel businesses and lubricants division.
The network sold about 3.5 billion litres of fuel in 2025, highlighting the scale of Shell’s presence in the South African market. If completed, the acquisition would give ADNOC close to 10% of South Africa’s retail fuel market.
The transaction is expected to close in 2027, subject to regulatory approvals. Taken together, the developments point to a significant shift in Shell’s position in South Africa. The company is facing a setback in its efforts to explore the country’s offshore resources while preparing to sell the downstream business that has anchored its presence there for generations.
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