Fewer foreigners buying SA property
ENERGY and chemicals group Sasol has increased its natural gas, condensate and crude oil production in Mozambique and Gabon in the year ended June.
The company said in a production and sales update on Friday that natural gas production from Mozambique had increased from 11.3 billion standard cubic feet to 16.4 billion standard cubic feet.
“(The) increase in production is due to our efforts to de-bottleneck the production facility and the increase in the gas transformation capacity to 169 billion standard cubic feet,” Sasol said.
Sasol has been producing natural gas at its central processing facility in Temane, Mozambique, since 2004.
The gas, from the Pande and Temane gas fields in Mozambique, is transported through a 66.04cm, 865 kilometre pipeline from Temane to Secunda in South Africa and markets in Mozambique.
In May, Sasol announced expansion plans, which included drilling 13 onshore exploration wells in Mozambique. The company also plans to build an integrated oil and liquefied petroleum gas facility and a gas processing train at the central processing facility to process the additional gas.
Sasol said crude oil production from Gabon from 1 339 thousand barrels last year to 1 529 thousand barrels.
“The increase from prior year is mainly due to new wells from the Etame Expansion Project and South Etame and North Tchibala coming on line.
The comparative crude oil production volumes for Gabon have been restated to exclude royalties to reflect the net production volume throughout,” Sasol said.
Sasol said natural gas production in Canada had fallen from 21.8 billion standard cubic feet to 20.7 billion standard cubic feet.
(The) increase in production is due to our efforts to de-bottleneck the production facility.
“In line with our low oil price response plan, we have reduced appraisal, development and drilling activities in Canada during the 2016 financial year until such time we see a sustainable recovery in North American gas prices,” Sasol said in the production update.
Sasol’s energy business increased liquid fuels production by 1 percent compared with last year.
It attributed the 1 percent increase in total synfuel production, a higher portion of synfuels volumes utilised by the energy business in the first half of the financial year, to the commissioning of an expansion project at the Secunda complex and a stable throughput from the National Petroleum Refiners Of South Africa (Natref). Natref is jointly owned by Sasol and Total South Africa.
Sasol’s sales of so-called white product liquid fuels, which include diesel, petrol and jet fuel, declined marginally from 59.2 million last year to 58.8 million barrels.
In the year to June 30, the Oryx gas-to-liquids plant in Ras Laffan Industrial City, in Qatar, in which Sasol has a 49 percent interest, reduced production from the previous 5.21 million barrels to 4.72 million barrels.
Qatar Petroleum owns 51 percent of the project. Sasol said an extended planned statutory shutdown in the third quarter of the 2016 financial year affected the Qatar facility’s average utilisation rate.
Sasol shares slumped 2.31 percent lower to close at R363.38 on the JSE on Friday. THE RISE in the buying of residential property in South Africa by foreigners has “more-or-less” come to an end, according to First National Bank (FNB).
The bank said there was a strengthening trend in buying between 2012 and 2014 but its foreign buying confidence index suggested an almost sideways movement recently.
FNB said the estimated level of foreign buying recovered from a low of 2 percent in late 2010 to peak at 5.77 percent in the final quarters of 2014.
John Loos, a household and property sector strategist at FNB, said last week that a strengthening in the value of the rand could have partly contributed to downward pressure on foreign buying levels by ending the improving affordability trend in recent years.
Loos added that fluctuations in the rand exchange rate, which raised the cost of local property for aspirant foreign buyers, could conceivably influence foreign buyer levels.
However, he said they believed the popularity of property globally as an asset class had a major influence and it appeared that property had “gone off the boil” since around late 2013 to early 2014.
“Using the Knight Frank Global House Price index, the post 2008/09 recession peak in global house price growth was reached in the third quarter of 2013, measuring 6.3 percent year on year. By the first and second quarter of 2015, the rate of increase had subsided to 2.1 percent before recovering somewhat to 3.4 percent in early 2016,” he said.
Loos said they believed the performance of residential property globally was the key influence on foreign buying direction because FNB’s agent survey suggested the growth in foreign buying had slowed since 2014 despite the further slide in the value of the rand up to the end of last year.
“What had changed from 2014 onwards was slower global house price growth.”
Loos said South Africa had never been a major residential investment destination but buying by UK residents was perceived to have been a significant source of demand.
He said the vote in the UK referendum to leave the EU might have had a mild impact on demand from UK residents because the weakening value of the pound had made South African property more expensive for buyers with pounds.
Loos said FNB’s house price index denominated in US dollars declined last month by minus 7.4 percent year on year and the euro-denominated index by minus 8 percent, but the UK pound-denominated index rose “by a very significant plus 9.6 percent year on year”.
He said this sharp jump in domestic house price inflation for pound investors had resulted largely from a post-Brexit drop in the value of the pound from an average R22.33 to the pound in May to R18.95 last month.
FNB said buyers from Africa accounted for 27.5 percent of total foreigner buying in the first half of this year compared with the two quarters moving average of 31 percent for the first quarter of the year but remained high compared with a mere 8.5 percent in 2010.