SASOL, South Africa’s integrated energy and chemical company, is investing an undisclosed amount of money but running to “hundreds of millions of Rands” as it intensifies oil and gas exploration in neighbouring Mozambique.
Already Sasol had created more than 3 000 jobs in Mozambique since the giant energy company started operations in this southern African resource-rich nation.
The investment follows discoveries of more oil and gas fields in Mozambique’s northern region, near the border with Tanzania.
Several companies from Britain, France, Japan and the United States have thronged the area but Sasol continues playing leading role in ensuring South African market is well supplied while Mozambique’s industry is also catered for.
Sasol, which is Mozambique’s leading natural gas producing company in provinces such as Inhambane, where over 2,6 trillion cubic feet (tcf) reserves have been discovered, processes the energy products at its central facility in Temane, before transporting the liquefied petroleum gas and oil via an 865 km pipeline to South Africa, with a link to southern Mozambique for domestic consumption.
Alex Anderson, Sasol Head of Group Media Relations, said vast oil and gas discoveries were encouraging, hence the Johannesburg-headquartered company was increasing its investment in Mozambique.
“Our ongoing investment in Mozambique affirms our steadfast commitment to the country. Tens of millions of dollars will be spent in shooting seismic and drilling exploratory wells in these new licenses to increase the hydrocarbon resources of Mozambique for the benefit of its people,” Anderson said.
Responding to questions emailed by CAJ News Africa, he said Mozambique remained firmly at the centre of Sasol’s growth strategy for Southern Africa.
“Together with our partners, we plan to expand the supply resource base through exploring for more gas in the acreage acquired through the fifth Bid Round.”
Sasol is currently concluding the fifth competitive bidding round license negotiations to execute the engineering, procurement, construction and commissioning (EPCCs) for Onshore PT5-C, near the Pande and Temane area in Inhambane Province and Offshore A5-A within Angoche area in Nampula Province.
“In our view, Mozambique remains a prime investment destination and we intend to continue investing in the country,” Anderson said.
He said Sasol recently completed a major drilling campaign in the Production Sharing Agreement (PSA) license area, drilling some nine wells in preparation for oil and gas production from the PSA.
“Further updates will be given during our financial results on 20 August,” Anderson added.
He said Mozambique and South Africa were key gas markets where condensate (light crude oil) is exported to international markets from Mozambique.
Sasol, which initiated its drilling of the first well for its PSA license in May 2016, continues the development of integrated oil, liquefied petroleum gas project adjacent its existing petroleum facility.
The initial first phase of the project included 13 wells and an LPG production facility for an estimated cost of $1,4 billion (R18,9 billion).
“We recognize the positive indicators within the market – inflation reduction, strengthening of the metical and improvements in foreign currency reserves. Sasol wishes to work with the Government of Mozambique to find solutions to address current challenges facing the country.”
Anderson said Sasol aspired to continuously drive mutual value creation in the country, with the move anticipated to ensure Mozambique’s hydrocarbon resources benefited all its 29 million people.
Since inception, over 300 permanent and 3 200 temporary jobs have been created through our operations and projects within the country, he said, adding 92 percent of Sasol employees in Mozambique are local.
“We are training over 460 artisans for the sector, and providing additional vocational training capacity in Mozambique,” Anderson disclosed.
In addition, over 700 community-related jobs were created through the community liaison forum.
“We continue to create shared value in partnership with the Government of Mozambique and our partners through Internship and learnership opportunities created at our Central Processing Plant and South African operations,” Anderson said.