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Sasol sees 2008 crude prices at mid-$60 Posted: Mon, 10 Sep 2007 [miningmx.com] -- SOUTH Africa’s Sasol, a leading producer of liquid fuel from coal and gas, forecasts the Brent crude oil price will average in the mid $60s in its 2008 financial year, which, combined with an average exchange rate of R7.25 to the dollar, will mean lower margins and peg earnings in line with record 2007 figures. Sasol expects dollar refining margins to soften in 2008. Sasol posted a 49% increase in operating profit at R25.6bn. It bought back R3.7bn worth of its shares and will continue to do so to have enough shares to put 10% of the company into empowerment equity structures. The synthetic fuels division makes up two thirds of Sasol’s operating profits. It plans to grow synthetic fuel production by 20%, of which three quarters will come from converting gas imported from Mozambique where Sasol is investing heavily in exploration. Sasol will use the strong cash flows from its business towards its R65bn growth plans, including an 80,000 barrels per day or more coal conversion plant in either the Free State province or the Waterberg coal fields in northern South Africa. The Waterberg is a large untapped coal resource where Exxaro Resources has its Grootegeluk mine. However, environmental red flags have been raised over the building of a heavy pollution plant in an area of natural beauty. There is also the question of a lack of water and its distance from the industrial heartland of Johannesburg. Click Here to subscribe to our daily newsletter
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