Sasol survives cyclone Dineo

Sasol’s oil and gas production in Inhambane province in southern Mozambique was not disrupted by cyclone Dineo, which hit the area on Thursday and Friday, Alex Anderson, head of group media relations, said on Friday.

Sasol’s oil and gas production in Inhambane province in southern Mozambique was not disrupted by cyclone Dineo, which hit the area on Thursday and Friday, Alex Anderson, head of group media relations, said on Friday.

Sasol is the only source of natural gas for customers in SA and Mozambique. It extracts gas from onshore wells in the Pande and Temane licence areas, takes it to a central processing facility and exports it to SA via an 865km pipeline. In May 2016 Sasol began drilling in the nearby Production Sharing Agreement (PSA) licence area for new sources of gas and oil, using a rig sourced from the US.

Seven people were reported to have died in Inhambane and 130,000 were affected by the initial force of the cyclone, according to preliminary assessments of the damage by Mozambique’s National Emergency Operational Centre.

Buildings were destroyed and power was disrupted. But the cyclone rapidly lost momentum and was later downgraded to a tropical depression.

Anderson said although strong winds and rain were experienced in the Temane area, the group had implemented response procedures, which protected its personnel and assets. Steps were being taken to resume drilling activities in the PSA area, which had to be temporarily suspended.

Sasol will release results for the six months to December on February 27. It said in a recent trading update its headline earnings would fall 34%-44% compared with the same period in 2015 because of exchange rate differences, a strike at its coal mines and the reversal of a provision in the previous year.

The shares dipped to R372.25 early on Friday but recovered to R376 in the afternoon.