Sasol said yesterday crude oil supply had been partially restored at its Natref refinery in Secunda and it was on track to reach full production by the end of this month.
The group said, however, in a production update for the year to June, 30 that there may be demand contraction for its products in the year ahead, as higher inflation and interest rates will continue to impact consumers.
On July, 15 Sasol declared force majeure on the supply of petroleum products to its customers following delays in crude oil shipments to Natref, due to a force majeure at the loading port in West Africa.
The other oil refineries in South Africa – Mossgas, Astron, Engen and Sapref – have all closed for various reasons including for reasons of financial viability and in the case of Astron, due to an explosion at the plant.
Sasol also produces liquid fuels from its coal-to-liquids synfuels business.
Despite the force majeur, the group said its fuel sales volumes for the year to June, 30 had exceeded market guidance of 52 to 54 million barrels due to increased demand.
Natref delivered a run rate of 555m³/h, which was 7 percent higher than during its 2021 financial year, and within market guidance of between 550m³/h to 570m³/h. The fourth quarter performance was also impacted by a planned shutdown and crude supply challenges, due to the floods in KwaZulu-Natal.
Natref, however, was able to support higher jet fuel output following infrastructure damage to help mitigate some of the jet fuel supply constraints in that time.
There were plans in place to maintain fuel supply to customers.
In the financial year overall, liquid fuel sales volumes were 2 percent higher than in 2021. There had, however, been a slight tapering in retail sales in the fourth quarter, due to the record-high fuel prices.
The group’s overall financial performance for the year including its chemicals and mining operations benefited from a favourable macroeconomic environment, a higher crude oil price, refining margins and chemicals prices following heightened geopolitical tensions.
The group warned, as it starts the 2023 financial year, that geopolitical instability, excess inventories from China, supply chain disruptions and potential shut downs related to the threatened Russian energy supply, might result in demand and price volatility in the months ahead.
In the mining operations, the focus remained to lift productivity and coal quality as well as ensuring stability across the operations.
In the chemical operations, external sales revenue increased by 22 percent from 2021, driven by higher average sales prices.
The average basket price increased by 39 percent from 2021 and increased by 13 percent in the fourth quarter of the financial year versus the third quarter, due to a combination of higher Brent crude oil and feedstock prices associated with the conflict in Ukraine, and continued global supply chain challenges which constrained market supply.
This was offset by lower sales volumes due to US Base Chemicals’ asset divestments, lower production from the group’s South Africa operations in the first half and delayed export of certain chemicals, following the flooding in KwaZulu-Natal.
Chemicals America experienced unplanned outages at the Louisiana Integrated Polyethylene JV Cracker in the fourth quarter.
Chemicals America sales revenue for the year ended June, 30 was 43 percent higher than 2021 driven by a 58 percent increase in sales prices, despite the lower sales volumes.
BUSINESS REPORT