After announcing its intention to sell its downstream operations business in South Africa, Shell could face a reduction in the granting of oil drilling licenses, Gwede Mantashe, Minister of Mineral Resources and Energy, revealed in a recent interview with Bloomberg.
No more drilling licenses for Shell?
The internal review of Shell’s portfolio has led to the decision to sell its stake in Shell Downstream SA (SDSA) , a company in which Thebe Investment Corporation, a black empowerment group, has a 28% stake. In the wake of these changes, Mantashe suggested that the government might be more reluctant to grant new permits to Shell, especially in the upstream sector, where the company still wants to maintain operations .
Furthermore, this situation is further complicated by the lack of clear legislation in South Africa on the development of upstream oil resources and by the significant discoveries by Shell and TotalEnergies in deep waters of Namibia, which has sparked significant interest in the region.
It is important to mention that the oil industry in Southern Africa is at a crucial moment. With new findings in Namibia and restructuring at companies like Shell, this is a transition period that could define the region’s future energy trajectory. It is essential that both companies and governments navigate these changes with a strategic and sustainable vision, ensuring that developments are not only profitable but also environmentally and socially responsible.
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Source: oilprice.com
Photo: Shutterstock
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