Shell is in advanced talks with Abu Dhabi National Oil Co (Adnoc) to sell its retail fuel stations in South Africa, according to people with knowledge of the matter.

Adnoc emerged as the preferred bidder after Shell’s talks with Gunvor Group — one of the world’s biggest independent oil traders — fell through, said the people who asked not to be identified as the discussions are private. An agreement may be reached as early as this quarter, they said.

An Adnoc unit said the company continually reviews opportunities for growth and declined to comment further. Shell declined to comment.

Acquiring Shell’s 600 retail fuel outlets will give Adnoc about 10% of the market in Africa’s biggest economy. The deal is likely to be valued at about $1-billion, the people said. The sale process started in 2024 and has advanced despite the conflict in the Middle East, showcasing Adnoc’s desire to expand in the world’s second-largest continent.

In April, Adnoc agreed to invest $500-million with its partner BP to develop a gas field in Egypt and has also been expanding its retail presence in that country.

The retail fuel market in South Africa has changed significantly in recent years, with trader Glencore Plc acquiring Chevron Corp’s Caltex-branded stations in 2018, while Vitol Group’s Vivo Energy last year bought Engen, the nation’s largest fuel-station chain.

Shell has been looking to sell its noncore holdings globally. Other interested parties in the South African assets included Trafigura’s Puma Energy, Sasol and State-owned PetroSA, though they aren’t part of the process anymore, the people said.