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Sasol refutes allegations of inflation of PSA Recoverable Costs

Date: 
16 June 2020

Maputo, Mozambique – Sasol would like to clarify the facts around recent media reports pertaining to Recoverable Contract Costs under the Production Sharing Agreement (PSA) license which is still in the development phase.

As clearly stated in the government report, the audit of the recoverable costs pertaining to the PSA license for the period 2017 and 2018, started in June 2019 and is ongoing. This is disclosed in the Annual General State Account (page 30) which can be found at this link: http://www.mef.gov.mz/index.php/documentos/instrumentos-de-gestao/-21/conta-geral-do-estado-cge/cge-2019/899-conta-geral-do-estado-2019-anexos-informativos-volume-i/file

Preliminary reports were issued in order to obtain initial feedback and Sasol has submitted additional information in order to explain its contrary view of the preliminary findings. This information is still being analysed by the auditing entity. 

Recoverable Contract Costs refer to Exploration Costs, Development and Production Capital Expenditure, Operating Costs, Service Costs and General and Administrative Expenses which are used in the calculation of petroleum profit sharing between the shareholders as determined in the PSA. 

As the operator of the PSA, Sasol ensures that all costs are correctly accounted for, under the terms of the agreement between the shareholders and the Mozambican government. These costs are subject to audit by INP, the regulator, as per the PSA license. Once the audit is complete, INP will disclose a full and complete audit report. 

Sasol is an ethical corporate citizen and we are committed to continue developing Mozambican hydrocarbon resources for the benefit of the country, its people and all stakeholders.

 

Sasol may, in this document, make certain statements that are not historical facts that 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, executing our growth projects (including LCCP), oil and gas reserves and cost reductions, including in connection with our BPEP, RP and our business performance outlook. Words such as “believe”, “anticipate”, “expect”, “intend", “seek”, “will”, “plan”, “could”, “may”, “endeavour”, “target”, “forecast” 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 on Form 20-F filed on 28 August 2018 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 only 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.
 
Please note: One billion is defined as one thousand million. bbl – barrel, bscf – billion standard cubic feet, mmscf – million standard cubic feet, oil references brent crude, mmboe – million barrels oil equivalent. All references to years refer to the financial year 30 June. Any reference to a calendar year is prefaced by the word “calendar”.