• SA cities need foreigners

    We need to protect our cities' cosmopolitan nature, says Mzwandile Jacks.

  • Am I a racist?

    Does hating government's arrogance, nepotism and greed make me a bigot, asks Anton Ressel.

  • Recipe for disaster

    Malema's flames of frustration are fuelling white extremism, says Leopold Scholtz.

See More

Sasol: Oil prices to stay steady

Feb 18 2010 07:25

Related Articles

Sasol perks up after slump

Rand, oil price to dent Sasol

SA cars may fill up on gas

Sasol, Tata plan CTL plant

Sasol bids for Zambian refinery

Stocks: what's in store in 2010?

Allan Gray: Market expensive


Johannesburg - Petrochemicals group Sasol, the world's top maker of motor fuel from coal, expects crude oil prices to stay at around the $70 a barrel mark for the remainder of its financial year, its head said on Wednesday.

Chief Executive Pat Davies said in an interview that while prices were volatile at the moment, he sees fundamentals for prices to be "fairly high" in the long term.

"For the remaining months of our financial year (we expect oil) to be around the $70 mark, just over $70... the fundamentals for higher oil prices in the long term are there," he told Reuters. Oil held above $77 a barrel on Wednesday.

Davies also said he expected the rand, which partly contributed to a forecast of a 50% to 55% fall in headline earnings per share for its first-half to end-December, would stay fairly strong against the dollar for the remainder of 2010.

The South African currency has risen around 20 percent versus the greenback since the start of 2009.

Davies said that while Sasol's capital expenditure would stay at R15bn for the current financial year and R17bn for the next, he expects a "fairly steep" rise in expenditure in the following year.

The money will fund Sasol's current projects in Africa, Middle East and Asia, which Davies said were on track, and also exploration.

He said the company expected to make a final investment decision on a proposed 80 000 barrels-per-day coal-to-liquids (CTL) plant in China by the end of this year, but did not want to be tied down to a date for when the plant would be built.

In the long term, the company plans to build at least another CTL plant in the Asian country, he said.

He said construction of a gas-to-liquids (GTL) plant in Nigeria, in which the company has a 10 percent economic stake and Chevron holds the majority 75 percent stake, was on track to be completed in 2011.

Davies said there was scope for new investments, with much interest in GTL and CTL technologies from around the world.

"The main driver for us as we grow, is based on where the resources are and at what cost ... and where there is a large domestic market (for fuel)," he said.

Davies said Sasol's GTL plant in Qatar was producing at and above design capacity and the company was planning to double its output in the long term, depending on gas allocation.

Davies does not expect a major hit from a proposed hike in South African electricity prices of 35 percent each year for the next three years, partly because of the company's ambition to produce up to 50 percent of its power needs by 2012.

"It would be a very high increase, but it's not going to destroy the competitiveness of Sasol," he said.

- Reuters



Read Fin24’s Comments Policy

24.com publishes all comments posted on articles provided that they adhere to our Comments Policy. Should you wish to report a comment for editorial review, please do so by clicking the 'Report Comment' button to the right of each comment.

Comment on this story
Add your comment
Comment 0 characters remaining

Company Snapshot

Brought to you by BizNews

More from BizNews

We're talking about:


Johannesburg has been selected to host the Global Entrepreneurship Congress in 2017. "[The congress] will ensure that small business development remains firmly on the national agenda and the radar screen of all stakeholders, the Small Business Development minister said.

Must see! The most luxurious dog house!

This dog house comes with a treadmill and hot tub, you have to see it!


Luxury living

Ridiculous demands people with too much money make
8 of the priciest places to dock your yacht
Habits of the world’s richest people

Money Clinic

Money Clinic
Do you have a question about your finances? We'll get an expert opinion.
Click here...

Voting Booth

Government’s call for the private sector to add power to the grid is:

Previous results · Suggest a vote