Abu Dhabi National Oil Company Named Finalist for Shell’s South African Downstream Assets Acquisition

Recently, countries in the Middle East have expressed interest in or completed transactions amounting to at least $6 billion for African energy assets, showcasing a growing investment focus in the continent from this region.

Sources report that Abu Dhabi National Oil Co is among the contenders for acquiring Shell Plc’s downstream assets in South Africa, which are estimated to be worth around $1 billion.

Read: Saudi investment in SA leads to billions in deals

In just a short period, Adnoc and other firms from the United Arab Emirates have shown interest in various sectors within Africa’s energy market. Gulf countries have ramped up investments in energy projects across the continent, including renewable energy facilities and oil explorations, in recent years.

Bilateral trade between Africa and the UAE increased by 38% over two years leading up to 2023, reaching a total of $86 billion, according to the African Export-Import Bank.

Andrew Farrand, the Middle East and North Africa director for the political risk consultancy Horizon Engage, notes that Gulf states are diversifying their oil and gas operations by procuring “assets and investments in other jurisdictions to cushion against cyclical fluctuations and localized market variations.”

“African nations present substantial opportunities in this context.”

Read:
South Africa must adjust to draw more FDI
Shell, Thebe nearing R18.5bn agreement for SA oil asset sales
Aramco and Trafigura reportedly vying for Shell’s SA assets

Alpha MBM Investments LLC, a private investment firm linked to the Dubai royal family, has signed a contract with Uganda to develop a refinery with a capacity of 60,000 barrels per day, securing a 60% stake in the initiative, as announced by the Ugandan presidency on March 30.

This $4 billion project comes after multiple unsuccessful attempts to set up a local refinery using crude oil found in landlocked areas. Alpha MBM did not respond to requests for comments.

Company	Deal Details	Value
Adnoc	Shortlisted for Shell’s South Africa unit	$1 billion
Alpha MBM	Refinery project in Uganda	$4 billion
XRG	Interest in Mozambique’s offshore gas finds	$1.4 billion
XRG	Joint venture with BP in Egypt for gas asset development	–

These collaborations signify a notable change for governments, collaborating with resource-rich partners “rather than merely focusing on resource extraction to bolster their domestic economies,” Farrand remarked.

Kenya has extended its fuel purchase agreement on credit for an additional two years with Adnoc, Saudi Aramco, and Emirates National Oil Co, which the nation credits for contributing to its currency stabilization.

Some of these imports are later sold to markets in South Sudan, the Democratic Republic of Congo, and Burundi.

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