Page 9 - AfrOil Week 14 2020
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The Algerian government’s action is hardly unprecedented. Last year, Sonatrach exer- cised its right to pre-empt a deal between Total (France) and Occidental Petroleum (US) for Hassi Berkine and other Algerian assets previ- ously owned by Anadarko Petroleum (US).
Currently, Edison E&P has a minority 11.25% stake in the Reggane Nord field. The remaining equity in the site is divided between Sonatrach, the operator, with 49%; Repsol (Spain), with 29.25%, and Wintershall Dea (Germany), with 19.5%.
Energean said on April 2 that it hoped to wrap up its acquisition of Edison E&P “as soon as is possible in 2020, subject to the approval of its shareholders and the other relevant gov- ernments.” It added: “Thereafter, Energean’s agreement for the sale of Edison E&P’s UK and Norwegian subsidiaries to Neptune [UK] for a consideration of $250mn plus contingent
consideration of up to $30mn (as previously announced) will be completed as soon as rea- sonably practicable.”
PERFORMANCE
Sasol to cut output amid lockdown
Reggane Nord is in SW Algeria (Image: Wintershall)
SOUTH AFRICA
South African chemicals group Sasol has said it will continue to run its refineries during corona- virus (COVID-19) lockdowns, but that output at some plants will be cut.
The company has also warned that its finan- cial results this year will be affected by the col- lapse in commodity prices and a recent credit ratings downgrade.
South Africans have been ordered by the government to remain at home until April 17, in order to combat the spread of the coronavi- rus. In a statement on March 31, Sasol said that most of its products were classified as essential, so would continue to be manufactured.
Sasol said it had formulated an alcohol blend to meet the growing demand for hand sanitiser, and it is also co-ordinating steps with the gov- ernment to prevent the virus’ spread.
Sasol’s overseas projects – the central gas
processing facility in Mozambique and the North American Lakes Charles Chemicals Pro- ject (LCCP) in the US – have not been affected by the crisis, it said. The company added that there were risks to its production, construc- tion and supply chains, and that its 2020 earn- ings could take a hit. S&P Global Ratings and Moody’s have just slashed Sasol’s credit ratings, to BB with a negative outlook and Ba2 under review for a downgrade respectively.
These downgrades will cost Sasol some $10mn per year, because its debt is indexed to its credit rating. Sasol has hedged 80% of its syn- thetic fuels at a price of $32 per barrel during the fourth quarter of the year.
Sasol still plans to proceed with a $2bn divestment programme, and a potential $2bn equity raise. The company aims to generate a further $2bn from cutting costs.
Sasol’s refineries will continue to operate during lockdowns (Photo: Mapio)
Week 13 01•April•2020 w w w . N E W S B A S E . c o m P9
