Shell was considering pulling out of Zimbabwe last night (JULY5) amid claims that President Robert Mugabe was reserving the distribution of fuel at petrol pumps for party supporters. A source at the oil giant said it was looking at a plan to halt activities in the country, which are overseen in a joint deal with BP. One option being canvassed is for Shell to sell its stake to a third party. Meanwhile both the UN Security Council and the European Union are drafting tougher sanctions aimed at members of the regime and their families, but probably stopping short of wider economic sanctions that some British politicians and Zimbabweans are calling for.Shell and BP supply 74 independent petrol stations in Zimbabwe. Supplies are piped from Mozambique and stored at four oil terminals. Both companies have bitter memories of the hostility they drew during the apartheid era in South Africa and minority rule in Rhodesia.
The political instability since last month's rigged presidential election was one factor under consideration by Shell, the source said. 'We have withdrawn from countries in the past where the situation was delicate,' he said. 'We are actively looking for a new solution.'
In a statement, Shell said: 'We have a shareholding in a small retail joint venture which is operated by BP. We are currently reviewing our position.' BP said it had no plans to withdraw.
Tino Bere, a member of the Zimbabwean Lawyers for Human Rights group, said that fuel imports - controlled by Mugabe loyalists - should be targeted. 'Access to fuel imported by the state is reserved for members of Zanu-PF,' he said. 'The majority of people won't suffer. They can get what they need on the black market.'
Shell would become the fourth company to pull out of Zimbabwe in the past fortnight. The British supermarket chain Tesco announced last week that it would stop sourcing products from Zimbabwe as long as the political crisis persisted. The London mayor, Boris Johnson, promised that London transport system's automatic Oyster payment card supplier EDS would not renew its contract with the Munich-based company Giesecke & Devrient, after it emerged that the company provides banknotes to Zimbabwe's central bank. The communications company WPP said it would divest its quarter stake in Y&R advertising agency since it emerged that a senior member of the company's management was advising Mugabe.