Maravi

Shell Petroleum pulls out of Zimbabwe

Shell Petroleum pulls out of Zimbabwe
By Kingsley Kaswende in Harare
Thursday July 17, 2008 [04:00]

DUTCH oil marketing company Shell Petroleum has decided to pull out of Zimbabwe and is selling its investment in the distribution business to South African Engen Petroleum. Pressure has continued to mount on European companies, which are succumbing to the urge to pull out of Zimbabwe as part of Europe's sanctions on the beleaguered southern African country.

Shell, which has a 50 per cent stake in the Zimbabwean joint venture with BP, said on Tuesday that it began reviewing its holding in October 2007, before Zimbabwe underwent a disputed and violent presidential election.

A fortnight ago Gieseke & Devrient, a German company that has been supplying banknote paper to the Reserve Bank of Zimbabwe over the past 45 years, succumbed to pressure from the German government to withdraw its services, a situation that has led to the chaotic shortage of money on the Zimbabwean financial market.

In confirming Shell's decision on Tuesday, company spokesman Rainer Winzenried said the company's holdings included about 230 retail sites throughout the country but declined to say how much the sale was worth.

"It's part of our revision of our downstream activities. We already started to look for buyers last year," he was quoted by Reuters as having commented in the Netherlands.
A statement posted on Engen's website confirms that the South African company will acquire Shell's downstream business interests in Lesotho and Zimbabwe, in terms of sale and purchase agreements signed this month.

Engen is South Africa's leading refined petroleum products company.
Engen chief executive officer and managing director Rashid Yusof said the deals with Shell were subject to approval from the countries' governments and central banks, as well as other regulatory requirements.

In the case of Zimbabwe, the deal is also subject to pre-emptive rights.
"Engen welcomes these investment opportunities. We have the utmost confidence in our future in both countries," Yusof said.
He said he had confidence in Zimbabwe.

"While Zimbabwe's economy has declined sharply over the last decade, it still has good infrastructure which we believe will form the basis of renewed economic growth, once the current political situation is resolved," he said.

"It is Engen's intention that current employees will retain their positions."
Engen is owned 80 per cent by Malaysia's national oil company Petronas and 20 per cent by South Africa's Worldwide Africa Investment Holdings.

Apart from Europe's sanctions, Zimbabwe's politics have been turbulent for eight years running and have severely disrupted business operations and created a hostile business environment.

The country has the world's highest inflation estimated by the local banks to be at over three million per cent, and strict state price controls.

This is coupled with an impending legislation that will now require all foreign companies to cede at least 51 per cent shares to indegenous Zimbabweans.
However, while some foreign firms are shutting down as a result, South African firms are resisting the urge to pull out.

South Africa has around 20 major companies and scores of smaller enterprises are still operating in Zimbabwe.

Among the biggest is Standard Bank, which trades under the name Stanbic in branches throughout Zimbabwe.

Supermarket chain 'Pick n Pay,' is also operating through its 25 per cent stake in Zimbabwe's TM Supermarket chain.

Mining giant Impala Platinum has the biggest foreign investment in Zimbabwe through its subsidiary Zimplats.

There are also scores of tour operations as well as trading businesses.

Labels: ROYAL DUTCH SHELL PLC, ZIMBABWE

posted by MrK @ 3:56 AM