Chemicals and energy group Sasol kept its expected output for the rest of its 2023 year unchanged, but lowered the guidance of SA’s inland crude oil refinery Natref amid lower lighter crude slate, hydrogen and steam availability in the third quarter.
This resulted in a 6% decline in the average run rate of the refinery quarter on quarter to 581m³/h. Natref is located in Sasolburg, the Free State, and is run in partnership with TotalEnergies SA.
The run rate reflects how much crude a refinery processes relative to its total processing capacity.
“We continue to review our crude procurement strategy to reduce the high premiums on West African crude purchased,” the company, valued at R154.3bn on the JSE, said in its production and sales figures for the nine months to end-March.
“Further pricing and demand volatility is expected for the remainder of the 2023 financial year in light of the global macroeconomic environment and the potential for ongoing disruption from Eskom and Transnet on our suppliers and customers in SA,” it said.
Natref falls under Sasol’s fuel business, which generated 21.1% of core earnings in its interim results to end-December.
Despite the lower run rate, the crude oil processed by Natref improved 0.66% to 15.2-million barrels. The company’s total sales revenue so far in 2023 is 8.8% lower than before at $6.97bn.
Financial services group Old Mutual recently raised concerns about what it deems to be a lack of clarity by Sasol about its strategy to reduce its carbon emissions, which are second only to Eskom. Old Mutual owns about 3% of Sasol.
The group said in its 2022 climate report earlier in April that it had climate-related engagements with its 53 investee companies, including prominent carbon emitter Sasol.
Old Mutual noted that Sasol was a large employer and key contributor to SA’s GDP, but believed it “failed to communicate a clear strategy that would resolve or improve its current climate metrics and carbon emissions”.
Linking pay to achieving its climate goals was an “important step” by Sasol, Old Mutual added, but said it wanted to gain a “better understanding of these metrics and to see targets ratcheted up over time”.
The discussions between the two companies included talks about an opportunity for Sasol to refinance its loan facilities using a combination of green bonds and sustainability-linked loans to “achieve specific climate mitigation goals, such as rolling out renewables and reconfiguring operations to more eco-efficient feedstock and emission mitigation measures”. /With Kabelo Khumalo
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