New wells give Sasol a boost

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Energy and chemicals group Sasol has increased its natural gas, condensate and crude oil production in Mozambique and Gabon in the year ended June.

The company said in a production and sales update on Friday that natural gas production from Mozambique had increased from 11.3 billion standard cubic feet to 16.4 billion standard cubic feet.

“(The) increase in production is due to our efforts to de-bottleneck the production facility and the increase in the gas transformation capacity to 169 billion standard cubic feet,” Sasol said.

Sasol has been producing natural gas at its central processing facility in Temane, Mozambique, since 2004.

The gas, from the Pande and Temane gas fields in Mozambique, is transported through a 66.04cm, 865km pipeline from Temane to Secunda in South Africa and markets in Mozambique.

In May, Sasol announced expansion plans, which included drilling 13 onshore exploration wells in Mozambique. The company also plans to build an integrated oil and liquefied petroleum gas facility and a gas processing train at the central processing facility to process the additional gas.

Sasol said crude oil production from Gabon from 1 339 thousand barrels last year to 1 529 thousand barrels.

“The increase from prior year is mainly due to new wells from the Etame Expansion Project and South Etame and North Tchibala coming on line.

Pande-Temane Gas Fields
Pande-Temane Gas Fields

The comparative crude oil production volumes for Gabon have been restated to exclude royalties to reflect the net production volume throughout, Sasol said.

Sasol said natural gas production in Canada had fallen from 21.8 billion standard cubic feet to 20.7 billion standard cubic feet.

“In line with our low oil price response plan, we have reduced appraisal, development and drilling activities in Canada during the 2016 financial year until such time we see a sustainable recovery in North American gas prices,” Sasol said in the production update.

Sasol’s energy business increased liquid fuels production by 1 percent compared with last year.

It attributed the 1 percent increase in total synfuel production, a higher portion of synfuels volumes utilised by the energy business in the first half of the financial year, to the commissioning of an expansion project at the Secunda complex and a stable throughput from the National Petroleum Refiners Of South Africa (Natref). Natref is jointly owned by Sasol and Total South Africa.

Sasol’s sales of so-called white product liquid fuels, which include diesel, petrol and jet fuel, declined marginally from 59.2 million last year to 58.8 million barrels.

In the year to June 30, the Oryx gas-to-liquids plant in Ras Laffan Industrial City, in Qatar, in which Sasol has a 49 percent interest, reduced production from the previous 5.21 million barrels to 4.72 million barrels.

Qatar Petroleum owns 51 percent of the project. Sasol said an extended planned statutory shutdown in the third quarter of the 2016 financial year affected the Qatar facility’s average utilisation rate.

Sasol shares slumped 2.31 percent lower to close at R363.38 on the JSE on Friday.

Source: IOL