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Global upgrades Sasol's long-term rating
International agency Global Credit Ratings has upgraded the long-term domestic rating of fuels and chemicals group Sasol to AA+, which it defines as "a very high credit quality with very strong protection factors". Sasol's short-term rating was reaffirmed by Global at A1+, the highest possible in this category.
Global analyst Nicholas Brett said the ratings were supported by Sasol's "soundly structured balance sheet and very strong cash flows". Sasol's leading position in the domestic fuel industry (it produces about 40% of SA's fuel needs) also supported the ratings. Brett said the ratings were constrained by the potential effect of the deregulation of the domestic fuel industry, "particularly with regard to the long-term margins in the group's petroleum operations". Brett said the most significant risk facing Sasol was its hefty capital investment programme, which could add up to as much as R27bn in the next four financial years. He said this can be expected to place a level of pressure on its financial risk profile, particularly if faced with a severe cyclical downturn.
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Sasol - natural gas to provide SA industry
Sasol is planning to use natural gas from Mozambique to provide electricity and steam for SA industry. This was disclosed by Sasol executive director Pat Davies at a conference on Sasol's R12bn pipeline project, which is expected to bring natural gas from Mozambique's Pande and Temane fields to Secunda early in 2004. The gas will then be fed along Sasol's existing gas pipeline network, where it will be sold to industrial customers and will also replace coal as a feedstock for Sasol's Sasolburg facilities. Sasol's energy adviser, Manoj Gokul, said that a longer-term objective of the project could be to use the gas to fuel small-scale power stations to help Eskom to cope with peaks in demand for electricity "such as cold mornings in Pretoria and Johannesburg, when everyone turns on their heaters at the same time". Davies announced that Sasol had formed a strategic alliance with Belgian firm Tractebel Electricity and Gas International, which would assess the market for new and existing applications for natural gas in SA. Davies said the first clusters to have been identified as potential sites for cogeneration plants were at Sasolburg and south of Durban.
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Sasol may get tariff protection if oil price falls
Sasol may receive tariff protection from the state if the oil price falls much further despite its R10.8bn operating profit in the year to Jun 01. Sasol has in the past vigorously defended tariff protection, a mechanism which is triggered when the derived oil price dips below $16 a barrel. This price, based on a basket of oil prices from Singapore and Bahrain, stood at $17.20 a barrel on 20 Nov 01.
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Businesman of the Year awarded to Sasol director
The Sunday Times-Business Times Businesman of the Year award was given to Sasol's deputy chairman and CE Pieter Cox.
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| Closing price data source: JSE Ltd. All other statistics calculated by ProfileData. |
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