Sasol CEO sees Mozambique as key to regional expansion plans

9/10/2015

By PAUL BURKHARDT
Bloomberg

Sasol is focusing its spending power on Mozambique as the world’s largest producer of liquid fuel from coal joins OAO Rosneft and ExxonMobil in bidding for new exploration blocks in the southern African nation.

Sasol bid with Italy’s Eni and Statoil on two of the blocks in the country’s fifth licensing round, while on a third it entered a partnership with Mozambique’s state oil company, CEO David Constable said in an interview at the firm’s headquarters in Johannesburg.

Sasol is also seeking approval to develop two oil and two gas reservoirs, which could supply a 400-megawatt power plant in the country.

Constable hopes the government will approve its reservoir development plans before the end of the year as Sasol targets expanding its upstream resources in the region. The company’s other focus as its conserves cash amid a slump in crude prices is to have an ethane cracker in the US operational by 2018.

"Mozambique is very important for us,” the CEO said. “We’re conserving cash as part of the response plan so that we can pay for the cracker and pay for Mozambique.”

Sasol is also supportive of South Africa’s program to use natural gas to generate 3,126 megawatts of power, Constable said. The company’s involvement could range from sourcing liquefied natural gas (LNG) to building facilities to receive the imports, he said.

In addition to the government program, “we’ve got commercial customers crying for gas," Constable said.