• British oil and gas giant BP has decided to exit all its aviation activities at South African airports.
• However, Shell has informed its aviation customers that it is committed to continue with its aviation fuel activities in the country.
• Asked if it is exiting its aviation operations in SA because of the government’s position on Russia, BP only it is “as a result of Air BP’s current global business strategy”.
• For more financial news, go to the News24 Business front page.

Global energy and petrochemical group Shell plans to continue its aviation fuel operations at airports in South Africa, unlike British oil and gas giant BP.

News24 reported last week that British oil and gas giant BP has decided to exit all its aviation activities at South African airports.

In a letter to its aviation customers, dated 27 March 2023 and seen by News24, Shell says it is aware of concerns regarding the group’s position in the South African aviation market.

“Shell Downstream South Africa is aware of the concerns raised following the exit of an aviation fuel supplier locally and would like to confirm that there is no change to our local operating model,” states the letter. “Shell remains committed … to the aviation supply and operations underpinned by our business control framework, policies, and guidelines.”

Pam Ntaka, a spokesperson of Shell SA, confirmed the letter’s contents and emphasised the group’s commitment to SA.

When asked whether it is exiting its aviation operations in SA because of the government’s position on Russia, BP only said the decision to withdraw is “as a result of Air BP’s current global business strategy”.

News24 reported earlier that, last year, two Russian planes could not get fuel from large international fuel suppliers at the OR Tambo International Airport in Johannesburg and Cape Town International Airport, respectively. This was because fuel suppliers had to adhere to the sanctions imposed on Russia by their countries of origin and their own company policies.

Despite international criticism, South Africa hosted Russia and China for naval exercises off the KwaZulu-Natal coast last month. South Africa was also one of 35 countries that abstained in a United Nations General Assembly vote which condemned Russia’s annexation of Ukrainian territories.

Last month, Airports Company SA (ACSA) told Parliament it would adopt a new refuelling plan to deal with a scenario “where a sanctioned friend of the South African government needs servicing and refuelling”.

ACSA’s new planned process will see oil companies only supply the fuel. A new independent operator will manage the facilities on ACSA’s behalf. The independent operator will operate the tanks and fuel hydrant, and the oil companies will have to pay a fee to the operator. The oil companies will consequently have no say in the refuelling of planes.

ACSA later “vehemently” denied that its plans to institute operational changes in aircraft refuelling are an attempt to bypass sanctions imposed by Western governments on Russian aircraft in response to Russia’s war on Ukraine. According to ACSA, its revised jet fuel strategy dates back to 2020, before the outbreak of the conflict in Ukraine.

State-owned PetroSA has indicated that is getting into the aviation space, starting with taking over from BP at the East London and George airports. PetroSA will buy jet fuel from existing traders in SA until there is enough demand to import a vessel of jet fuel – most likely from the Middle East.

SOURCE:

Shell will continue to fuel SA’s aviation industry, as peer BP exits | Business (news24.com)