Page 13 - DMEA Week 08 2023

DMEA NEWS IN BRIEF DMEA

POLICY cooperation on local content between Nigeria expected.
and its African counterparts such as Senegal “Sasol delivered a mixed set of results for
Nigeria, Senegal ink local will enable Africa as a whole to benefit from the first six months of 2023, supported by oil
and refining tailwinds offset by lower volumes
the country’s critical infrastructure as well
content deal as large-scale project developments such and higher feedstock costs,” the company
as the Dangote Integrated Refinery and
said.
A new Memorandum of Understanding Petrochemical Company and the Lekki Free “The impact from the global weaker
(MoU) signed between the Nigerian Trade Zone in Nigeria. economic growth, disrupted supply chains,
Content Development and Monitoring Wabote reiterated that local content depressed chemical prices and the resultant
Board (NCDMB) and Senegal’s Technical cooperation among African countries is higher input costs impacted the chemicals
Secretary of the National Content Monitoring crucial for innovating energy financing business negatively.”
Committee of Senegal (ST-CNSCL) will mechanisms and optimizing the maintenance “The average rand per barrel price of Brent
boost cooperation between the two countries of oil fields and infrastructure. crude oil increased by 43% and the average
regarding oil and gas industry growth, ENERGY CAPITAL chemical sales basket price (US$/t) increased
capacity building and skills development. by 3%,” the company said.
According to the terms of the MoU The oil price gushed to the bottom line; the
signed between the agencies, NCDMB will COMPANIES chemical price, not so much.
provide ST-CNSCL with strategic advice and The chemicals business was hit by the sour
guidance around energy law development and Sasol, outlier among global economy, while the oil and refining
implementation. businesses fared well. The latter would only be
NCDMB will also provide ST-CNSCL with fuel producers, posts expected: oil companies raked it in last year, in
advice on workforce and skills development part because of Russia’s invasion of Ukraine,
and data collection to help Senegal maximize disappointing H1 results which sent oil prices soaring.
local content buildup as the country joins the TotalEnergies, ExxonMobil, Chevron, BP
list of African oil and gas producing countries Petrochemicals giant Sasol should be printing and Shell had profits among them that totalled
in 2023 with the Sangomar Oil Development money because of the petrol’ part of its name $153.5-billion in 2022 equal to over a third the
and Greater Tortue Ahmeyim Gas projects oil majors have been posting record profits. size of South Africa’s gross domestic product.
coming online. But the chemicals sector has been waylaid Sasol is not in that league, but its fuels
While Nigeria has progressed with its local by a sour global economy and the upshot business did see earnings surge 92% for the
content development plans with the country has been a ‘mixed set of results’. Meanwhile, period. But Putin’s war, and the uncertainties
achieving 54% of its 70% target set for 2027, the company has launched some interesting and inflation it triggered, also torpedoed
the MoU between the two will be crucial initiatives on the decarbonisation front. much of the global economy, including Sasol’s
in helping Senegal ensure its people, local Sasol said in a trading update two weeks chemicals business.
companies and economies benefit from the ago that it expected its core headline earnings “The offshore chemicals business was
development, exploitation and monetization per share for the six months to the end of effectively wiped out”¦ It’s been a tough time
of oil and gas reserves. December to rise between 2% and 12%, which for our chemicals business,” Hanre Rossouw,
With the MoU, Nigeria and Senegal will was well short of Bloomberg’s consensus Sasol’s Group Chief Financial Officer, told
collaborate on addressing industry challenges expectations of a 39% increase. Business Maverick in an interview. He noted
including lack of adequate infrastructure So the bad news was mostly fully digested that the chemicals side, which had accounted
while promoting cross-border collaboration and the market was not surprised on Tuesday for 56% of profits previously, was down to
with the aim of resolving regional and global when the company unveiled interim earnings 39%. And the offshore chemicals business
energy security challenges and exploiting which showed that metric had risen 9% to only accounted for 3% of profit. Ouch.
associated opportunities. R24.55 per share. Still, its share price tanked Still, Sasol did declare an interim gross
Engr. Simbi Kesiye Wabote, Executive over 6% at one point in morning trade, cash dividend of 700 (SA) cents per share,
Secretary, NCDMB, stated that improved suggesting that the top end of its guidance was compared to nil for the interim period the
previous year.
And it did unveil some interesting
initiatives on the decarbonisation front.
As Africa’s second-biggest emitter of the
greenhouse gas emissions linked to climate
change topped only by Eskom the company
is under huge pressure to reduce its carbon
footprint and meet various targets it has set.
To that end, the company announced the
launch of Sasol Ventures. It said this was “to
advance Sasol’s decarbonisation and 2050 net
zero ambitions through venture capital.
It will invest $50-million over the next five
years, making it the largest chemicals and
industry venture capital fund in South Africa.
“The fund will pursue investments in
start-up and early-stage technologies that will

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