French oil company TotalEnergies, which only this week received the Competition Tribunal nod for the sale of its 36% stake in the Natref oil refinery is now also withdrawing from its South African offshore gas field interests, a blow for the country as the gas was meant to revive the Mossgas petroleum refinery.
The latest international disinvestment from the oil sector follows the announcement two months ago by Shell to divest of its South African downstream unit, a plan that includes the exit of its interests in the Durban-based SAPREF refinery, which has been shut since 2022 due to a spending freeze. Shell also operates more than 600 service stations in the country.
Liquid Fuels Wholesalers Association of South Africa CEO Peter Morgan said while he could not speak on behalf of the oil groups, it appeared the divestments were due to international petroleum groups shifting focus to renewable-energy investments, and because their shareholders were not getting sufficient returns from their investments in South Africa.
The Chemical Industries Education and Training Authority, following questions from Business Report, said the exits were likely influenced by multiple factors. A significant reason was the global shift towards renewable energy financial and market pressures were pushing these companies to diversify their portfolios and invest in renewable-energy technologies which are becoming more cost-competitive.
However local factors such as regulatory uncertainties, infrastructure challenges, and market dynamics in South Africa also play a role in these decisions, its directors said.
