Publications
Partners
Johannesburg - JSE-listed South African Congo Oil Company (SacOil) will inform shareholders whether the company's oil concessions in the Democratic Republic of Congo (DRC) have been approved by that government in early April.
SacOil is an oil and gas company, formerly known as SA Mineral Resources Corporation (Samroc).
SacOil has been involved in a tussle with London-listed Tullow Oil, its partner Heritage Oil and the DRC government regarding rights to two blocks of oil in the DRC.
The blocks - located in the Albertine Graben area, which is part of the Rift Valley on the boundary between the north-eastern DRC and Uganda - were initially intended for Tullow, but DRC President Joseph Kabila did not sign off on this agreement.
SacOil also lays claim to the oil blocks and says the only remaining condition for their acquisition is the president's signature. The company says that it has given the DRC government $3.4m (about R27.8m using a rand/dollar exchange rate of R8.08/dollar) as a "signature bonus" for the oil concessions, "normal for transactions of this nature", it said this week.
"We don't have a disagreement with Tullow; they might have a disagreement with the DRC government," Robin Vela, a non-executive director at SacOil, told Fin24.com.
For the six months to end-December 2008, SacOil paid R1.8m in consulting fees for the DRC transaction, according to SacOil's financial director, Karina de Beer.
SacOil has a unique per-project relationship with the SA petroleum and gas parastatal Petrosa, which acts as a "technical contributor" to the blocks in the DRC.
Vela said PetroSA "...provides sovereign protection by the South African government and they bring a hell of a lot of expertise".
SacOil's core business till now has been is its Greenhills chemical manganese processing plant near Graskop in Mpumalanga, where it manufactures manganese sulphate powder, manganese sulphate solution and manganese oxide.
"The company has now definitely changed its focus to oil and gas," said de Beer. "The Greenhills plant is the current business, but it's not the future business," she said
Two years ago, plant was partially damaged by a fire and saw a significant fall-off in sales.
Results for the six months to end-December 2008 stated that "the Greenhills plant managed to increase sales levels. A weaker rand facilitated higher levels of export sales".
Year-on-year the company's interim results showed an increase in revenue of 49% to R16.7m and gross profit was marginally down 2.8% to R3.1m. However, operating costs of R5.6m and a loss from operations of R2.5m resulted in a pre-tax loss of R2.2m. This translated into a headline loss of 0.7c/share, smaller than 0.87c/share reported in the six months to end-December 2007.
For the period under review, the company took the decision not to declare a dividend to shareholders.
SacOil has a market capitalisation of R298.9m. The share is illiquid and its share price went unchanged on Friday morning at 63c/share.
- Fin24.com
