assets, growth and development strategies leveraging first mover - - PowerPoint PPT Presentation

assets, growth and development strategies

Ebbie Haan, managing director, Sasol Petroleum International

leveraging first mover advantage

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Forward-looking statements: Sasol may, in this document, make certain statements that are not historical facts and relate to analyses and other information which are based on forecasts of future results and estimates of amounts not yet determinable. These statements may also relate to our future prospects, developments and business

• strategies. Examples of such forward-looking statements include, but are not limited to, statements regarding

exchange rate fluctuations, volume growth, increases in market share, total shareholder return and cost reductions. Words such as “believe”, “anticipate”, “expect”, “intend”, “seek”, “will”, “plan”, “could”, “may”, “endeavour” and “project” and similar expressions are intended to identify such forward-looking statements, but are not the exclusive means of identifying such statements. By their very nature, forward-looking statements involve inherent risks and uncertainties, both general and specific, and there are risks that the predictions, forecasts, projections and other forward-looking statements will not be achieved. If one or more of these risks materialise, or should underlying assumptions prove incorrect, our actual results may differ materially from those anticipated. You should understand that a number of important factors could cause actual results to differ materially from the plans, objectives, expectations, estimates and intentions expressed in such forward-looking statements. These factors are discussed more fully in our most recent annual report under the Securities Exchange Act of 1934 on Form 20-F filed on 09 October 2013 and in other filings with the United States Securities and Exchange Commission. The list of factors discussed therein is not exhaustive; when relying on forward-looking statements to make investment decisions, you should carefully consider both these factors and other uncertainties and events. Forward-looking statements apply

• nly as of the date on which they are made, and we do not undertake any obligation to update or revise any of

them, whether as a result of new information, future events or otherwise.

forward-looking statements

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leveraging our first mover advantage

Mozambique resource potential presents new opportunities and challenges Mozambique prioritising in-country monetisation Could Qatar’s growth trend be mirrored in Mozambique? Sasol: acting as a catalyst for development in Mozambique Sasol is well positioned to leverage its first mover advantage Conclusion

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• Mozambique is on the verge of step change in

energy development:

• Significant gas finds in the north are the largest

global discoveries in the last decade1

• Projects in Tete could provide 100 million tonnes of

coal for export within the decade making it a bigger coal exporter than South Africa²

• The south could continue to be a stable hydrocarbon

producer for years to come with upside potential

• The current reality is that the opportunity comes

with significant challenges:

• Infrastructure not yet on par with development pace
• Human capacity requires focused development
• Domestic markets are limited so Southern African

markets may be required to enable development of world scale industries in country Resource-led development could have a profound impact on the future regional energy landscape

Mozambique resource potential presents new opportunities and challenges

Could the promise be turned into reality?

1 US Chamber of commerce: Africa business institute, January 2013 2 African business July 2013

Mozambique gas and coal reserves

Source: African business July 2013 and ENH presentation, Gas Summit 2013

50 100 200 Kilometers 300 400 Coal reserves Sasol Gas pipeline CPF CTRG

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Mozambique’s Gas Master Plan prioritises power GTL, fertilizers and methanol

Mozambique prioritising in-country monetisation from its recent natural gas discoveries

Major gas developments

• LNG in Palma and Beira
• Gas infrastructure to enable LPG and other

industries

• Fertilizer and power plants
• Petrochemical complex in Beira
• GTL in Palma and Inhambane
• Pipeline support to expand SMEs
• City gas distribution network

Government of Mozambique estimated to collect US$10s billions from gas for development

• Diversified economy, agricultural modernisation

and broad spread electrification

• Infrastructure demand gap addressed
• Expanded industrialisation, SMEs and spinoffs

from mega projects

• Growing educated workforce, growth of

professional services

50 100 200 Kilometers 300 400

N

Palma Pemba Nacala Nampula Tete Beira Pande/ Temane Matola/Maputo Ressano Garcia

Discovered resources Undiscovered gas fields

Illustrative end-state vision for Mozambique in 2030

Source: ICF, The World Bank and Government of Mozambique Steering Committee, December 2012

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could Qatar’s growth trend be mirrored in Mozambique?

GDP trend to 2025 GDP trend to 2011

Qatar: Initial investment in the gas value chain was export based:

• 1991: phase 1 of the US$1.5bn North Field gas

development project completed

• 1996: Qatar begins exporting liquefied natural

gas to Japan

• In the mid-90s focused on capturing more of the natural

gas value chain in-country

• partnering with Sasol in ORYX GTL, the first

commercial scale GTL plant outside South Africa

• Today, Qatar has realised its vision to be

“GTL Capital of the World” Mozambique: On the cusp of becoming one of Africa’s biggest energy producers:

• 1994: US$1,2bn Sasol led Natural Gas Project

completed targeting markets in South Africa

• ~2018: Mozambique hopes to export its first cargoes of

liquefied natural gas by 2018 “~US$40bn to be invested in plant and infrastructure capable

• f exporting 20 million metric tonnes of LNG and a local

distribution hub to service domestic energy needs as well as those of its near neighbours…” - Minister Esperança Bias

Source: The Wall Street Journal, July 2012 Note: Assume Qatar growth rate at 6.5% p/a, Mozambique growth at 8.5% p/a to 2017, 15% to 2020, thereafter 25% p/a. Source: The World Bank, EIA

Forecast – aligned to historical Qatari growth

50 100 150 200 250 2011 2013 2015 2017 2019 2021 2023 2025 Gross Domestic Product US$ billions Qatar (1997 - 2011) Mozambique (2011 - 2030) 40 80 120 160 200 1997 1999 2001 2003 2005 2007 2009 2011 Gross Domestic Product US$ billions Qatar Mozambique First LNG exports Oil and Gas sector contribute 58% of GDP Moz 2011 = Qatar 1997

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• Developed stranded gas fields through strong partnerships and technological expertise
• Contributed to creation of favourable and safe investment climate and established E & P sector in country
• Gas development with our partners has been a catalyst for GDP growth through:
• Revenue generated from equity investment in the natural gas project
• Tax revenue (one of the largest tax payers in the country) significantly higher when investment paid off
• Capital investments and spin-offs from secondary industries

Sasol: acting as a catalyst for development in Mozambique

To date Sasol and its partners have spent and committed to investment US$3bn. Total investments in Mozambique US$ millions 50 100 150 200 250 300 350 400 450 FY04 FY06 FY08 FY10 FY12 FY14 FY16 FY18

PPA UJV ROMPCO PSA CTRG Total exploration costs (offshore and onshore) Forecast

The cumulative direct contribution to the Mozambique government over the first 10 years is US$ 616 million while the contribution for the next 10 years is forecast to be US$3,5bn. Total gross direct annual contribution to the GoM US$ millions 500 1 000 1 500 2 000 2 500 3 000 3 500 4 000 4 500 FY04 FY06 FY08 FY10 FY12 FY14 FY16 FY18 FY20 FY22 Cumulative contribution

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Our unique combination of capabilities enabled by effective partnerships demonstrates our ability to unlock significant benefit for all stakeholders

Sasol is well positioned to leverage its first mover advantage in Mozambique’s hydrocarbon space

• Gas
• Condensate
• Oil

Operations

A decade of sustained gas production – access to proven gas and oil resources

• Natural gas Central

Processing Facility in Temane

• Cross country, cross border

pipeline

• Building gas to power plant

Infrastructure

We have competence in building, managing and maintaining pipelines

• Base load – RSA
• Partnering in developing

domestic markets

Markets and technology

We have proven monetisation technologies and established markets in the region

The foundation of Sasol’s competitive advantage in the region

Strategic and sustainable partnerships Capacity building and skills development Extensive market presence

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building on our strategic partnerships

leveraging our first mover advantage

• Natural gas Central Processing

Facility in Temane

• Cross country, cross border

pipeline

• Building gas to power plant

Infrastructure

We have competence in building, managing and maintaining pipelines

• Base load – RSA
• Partnering in developing

domestic markets

Markets and technology

We have proven monetisation technologies and established markets in the region

• Gas
• Condensate
• Oil

Operations

A decade of sustained gas production – access to proven gas and oil resources

The foundation of Sasol’s competitive advantage in the region

Strategic and sustainable partnerships Capacity building and skills development Extensive market presence

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• Partners in the central processing facility (CPF): Sasol 70% (Operator), CMH 25%, IFC 5%
• Equity in pipeline company (ROMPCO): Sasol Gas 50% (Operator), CMG (25%), iGAS (25%)
• CTRG – joint venture for power generation at Ressano Garcia: EDM, Sasol New Energy
• ENH – natural gas reticulation project agreement signed
• PESS is a joint venture between Sasol and Petromoc
• PeSS supplies liquid fuel and lubricant products to the mining, road haulage, construction

and agricultural segments throughout Mozambique

• Currently PESS sells approximately 80 million litres of petroleum product annually

leveraging our first mover advantage

building on our strategic partnerships: the platform upon which we have grown our presence in Mozambique

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• Gas
• Condensate
• Oil

Operations

A decade of sustained gas production – access to proven gas and oil resources

• Base load – RSA
• Partnering in developing

domestic markets

Markets and technology

We have proven monetisation technologies and established markets in the region

The foundation of Sasol’s competitive advantage in the region

Strategic and sustainable partnerships Extensive regional market presence

• Natural gas Central Processing

Facility in Temane

• Cross country, cross border

pipeline

• Building gas to power plant

Infrastructure

We have competence in building, managing and maintaining pipelines

Capacity building and skills development

In partnership with Government of Mozambique, we are contributing to building a talent pipeline to resource the oil and gas industry.

leveraging our first mover advantage

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driving the development of expertise and skills

In partnership with Government of Mozambique, we are contributing to building a talent pipeline to resource the oil and gas industry. Over the next five years we forecast spend of over US$12.4 million for:

• Bursary programme, in partnership with MIREM, aimed at

developing 30 students per annum, to study in the areas of geology, petroleum, drilling and reservoir engineering;

• Designed to ensure industry knowledge and develop

life skills to prepare the bursars for life beyond university

• Sasol’s learnership programme is fast tracking the

development of sought after artisans, in the fields of electrical, instrumentation, mechanical fitting and production;

• Programme started in 2011, the first learners completed their

training and will be appointed as artisans at the CPF in 2014

• Leveraging Sasol’s university collaboration approach to build the

necessary value adding capabilities within Mozambican universities

Vania Martinho, 18, Nampula Province, Mozambique. studying Petroleum Engineering in South Africa

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Sasol is playing a key role in the development of a domestic gas market and enabling energy security

leveraging our first mover advantage

• Gas
• Condensate
• Oil

Operations

A decade of sustained gas production – access to proven gas and oil resources

• Natural gas Central Processing

Facility in Temane

• Cross country, cross border

pipeline

• Building gas to power plant

Infrastructure

We have competence in building, managing and maintaining pipelines

The foundation of Sasol’s competitive advantage in the region

Strategic and sustainable partnerships Capacity building and skills development

Markets and technology

We have proven monetisation technologies and established markets in the region

Extensive market presence

• Base load – RSA
• Partnering in developing

domestic markets

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Royalty gas from the Sasol operated gas fields has successfully stimulated a nascent domestic gas market

the domestic gas market has now developed

0.3 1.3 1.4 1.8 2.9 3.2 3.4 3.8 3.5 0.6 3.5 3.4 3.5 3.6 2.4 2.1 2.9 2.6 3.9 FY04 FY05 FY06 FY07 FY08 FY09 FY10 FY11 FY12 FY13 GJ (millions) 5% gas royalty entitlement analysis – GJ Natural gas in kind In cash

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leveraging our first mover advantage

Sasol is playing a key role in developing a domestic gas market and enabling energy security

Assisting in driving the domestic energy industry geared to service the region as a whole:

• 25 MGJ/a of the CPF’s expanded capacity sold

to industries in Mozambique for power generation

• ENH has contracted to purchase 6 MGJ/a for

gas reticulation in the Maputo area

• The US$246m, 140 MW-capacity gas engine

project – due to be operational first half of 2014 calendar year

• This partnership between Sasol New Energy

and EDM will be the first long-term large- scale gas to power plant

Gas to power plant, Ressano Garcia Gas reticulation in Inhambane Province

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enabled and sustained by our licence portfolio in Mozambique

License Acreage (approx. km2) SPI equity (%) Partners Status Pande/Temane PPA 1 728 70 CMH (25%) IFC (5%) Production PSA 1 792 100 Appraisal Area A 8 400 90 ENH (10%) Exploration Sofala 5 752 85 ENH (15%) Exploration Block 16/19 2 965 50 Petronas (35%) ENH (15%) Exploration

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• ver US$2 billion committed to meet growing

market demand

Project Beneficial

• perations

Objective Capital expenditure CPF expansion 2012 Expansion to cater for growing market demand US$222m Optimisation and sustainment projects e.g. LP & HP compression, electrical expansion etc. 2012-2018 To sustain and grow production to meet increasing market demand US$2bn Pipeline loop line 1 2014 Meeting growing market demand US$200m Total US$2,4bn Forecast 50 100 150 200 250 300 350 400

FY01 FY02 FY03 FY04 FY05 FY06 FY07 FY08 FY09 FY10 FY11 FY12 FY13 FY14 FY15 FY16 FY17 FY18 FY19

mmscf/d PPA production volumes Equity share, risked Mozambique (PPA)

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PSA licence... building on initial foundation to meet evolving market demand

• The PSA licence is adjacent to the current producing PPA area:
• Separated from the initial commercial discoveries to enable initial development of a 120 MGJ/a project
• SPI conducted two phases of extensive appraisal drilling in 2003 and in 2007-2008 – both oil and gas

discovered

• An EWT was conducted on the

Inhassoro oil rim – produced over 236 000 bbls of light oil until the end

• f March 2013 as part of the appraisal

programme

• Notice of commerciality declared in

early 2013 on the following reservoirs:

• Inhassoro G6 and G10 (oil)
• Temane G8 (natural gas)
• Temane East (natural gas)
• Development planning currently

underway – final investment decision expected February 2015

! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! 35°30'0"E 35°30'0"E 35°15'0"E 35°15'0"E 35°0'0"E 35°0'0"E 34°45'0"E 34°45'0"E 34°30'0"E 34°30'0"E 21°15'0"S 21°30'0"S 21°45'0"S 22°0'0"S ! ! ! Pipelines

Roads Towns_CPF PSA PPA

10 20 30 40 50 5 Kilometers

N

Inhassoro Vilanculos CPF

Pande G-10 Temane G-8 Temane East Inhassoro G-6 Temane Main G-6 Oil Rim Inhassoro G-10 Inhassoro G-10 Tafula Corvo Pande Main

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• 2,247km of new 2D seismic acquired over the entire concession

from end October 2012 to mid October 2013, processing being completed

• One large structural high up to 200km2 closure identified in

southwest part of the concession, with associated amplitudes

• n far stacks at multiple levels. Updip from syn-rift graben

feature with potential for both gas and lacustrine oil-prone source rock. Interpretation of remainder of block ongoing

• ur next exploration focus is Area A

TOP G6 DEPTH STRUCTURE 20 kms G6 FAR STACK AMPLITUDE 20 kms

Grudja G-6

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looking ahead

• Pursue exploration

activities

• Optimise current assets
• Explore additional
• pportunities to monetise

natural gas in country

• Explore for partnership
• pportunities to leverage

Sasol’s gas monetisation technology

• Build local skills and

supplier capacity

• Pursue sustainable

relations with community stakeholders

• Continue to align our

activities with government drivers, e.g., education, health, energy security and food security

Operations Continue growing

• ur

heartland Licence to thrive

thank you