South African integrated energy and chemicals company Sasol Ltd. (SSL) on Thursday unveiled its refined corporate strategy, aiming for sustainable growth and accelerated shareholder returns. The company expects to deliver at least 12% ROIC and 5% earnings before interest and tax growth through the cycle, in the medium to longer-term.
Sasol said it will not invest in further Greenfields gas-to-liquids projects. This decision means the company will no longer pursue its proposed GTL project in the US.
The company said its reviews on more than half of its global assets confirmed that the majority of the company's assets will be retained and clear improvement actions have been defined for each.
Sasol will commence a structured divestment process for Canadian shale gas asset, which was identified as non-core, involving Progress Energy, the partner in this asset.
Sasol said its foundation businesses, which are already cash positive at a $40 per barrel oil price, provide a robust platform for long-term growth and delivery of ongoing value to shareholders.
The company will progressively grow its portfolio of high-value specialty chemicals in attractive growth sectors.
The company noted that megatrends influential to its business will result in greater demand for chemicals and energy products in key markets.
From now until 2022, Sasol will focus on delivery of the Lake Charles Chemicals Project (LCCP) in the US and the Production Sharing Agreement in Mozambique.
Beyond 2022, the company will focus on building an investment portfolio of smaller to medium-sized organic and inorganic opportunities, in the range of $500 million to $1 billion.
Joint President and CEO, Bongani Nqwababa said, ""While we have a solid foundation business in commodity chemicals and the world-scale LCCP under construction in the US, the risk profile to execute such projects alone, in the future, is larger than what Sasol wishes to undertake. Such investments in feedstock-advantaged locations may still be considered, but we will not entertain wholly-owned investments in similar mega-projects, such as the LCCP, going forward."
On the upstream front, the company will pursue progressive, disciplined growth in E&P both in Mozambique and in selected countries in West Africa, to expand production levels with a bias to liquid plays.
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