Sasol pursues its African dream

Petrochemical giant Sasol is eyeing potential expansion into Angola, Ghana and Tanzania, but Mozambique remains its immediate focus in Africa.

With most of its footprint still in South Africa, Sasol reported a 14% increase in full-year earnings, boosted by higher chemical prices and a weak rand.

CEO David Constable said at the company's results presentation yesterday that nine of the 17 largest gas discoveries in the past five years were in sub-Saharan Africa. He added there was a huge hydrocarbon potential in the region.

Sasol is conducting a study to build a gas-to-liquid plant in northern Mozambique with Italian oil and gas group Eni and Mozambique's oil company, Empresa Nacional de Hidrocarbonetos.

"Our first priority is Mozambique," Constable said.

Asked what countries Sasol would consider expanding into, he replied: "Angola, Ghana onshore and Tanzania. Those types of countries [are] where we'll take a run." Tanzania has made big natural gas discoveries off its southern coast and hopes to use its deposits to end chronic energy shortages.

Constable said Sasol could go into producing assets - into existing blocks as a non-operator - or take part in oil or gas exploration in these countries.

The group also said it had obtained all the air, water and wetlands permits for its mega-projects in the southern US state of Louisiana, an ethane cracker and derivatives plant and an integrated gas-to-liquids and chemicals facility, which are expected to cost between $16-billion and $21-billion to build.

"We're making good progress on the financing," it said.