the monetisation opportunity: a decade of adding value in mozambique - i hill (24 june 2014)

better together ... we deliver

24 June 2014

The monetisation opportunity: A decade of adding value in Mozambique

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Strictly confidential. Not for further distribution


Forward-looking statements

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 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.

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Contents

Opportunities and challenges

Adding value by overcoming challenges

Growing value-add through strategic partnerships

Developing a local gas market and enabling energy security

Promoting local skills and supplier development

Looking ahead: to the next decade and beyond

Sasol’s capabilities

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Mozambique resource potential presents new opportunities and challenges

• Mozambique is on the verge of a step change in investment in the energy value chain:

• Significant gas finds in Northern Mozambique could potentially change the energy landscape in the region

• The north-western province of Tete is regarded as the largest undiscovered coal province globally; estimated output – 25% of the world’s coking coal by 2025¹

• The central and southern part of the country should continue to be a stable producer of hydrocarbons for years to come with upside potential

• This opportunity comes with significant challenges: • Infrastructure not yet on par with development

pace

• Human capacity requires focused development

• Southern African markets may be required to enable development of world scale industries in country

• Resource led development could have a profound impact not only on the future of the country but also on the region.

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Fortunately the country has experienced a stable business environment in the past decade

● Mozambique’s investor-friendly climate

is an appealing destination for

international capital. This needs to

continue through:

• Stable contracts

• Constantly improving infrastructure

e.g. new airports and stabilisation of

electricity supply

• Maintaining a fiscal regime that

supports both the government and

international investors

● To compete in the global arena,

Mozambique should consider steps to:

• Minimise restrictions on business

activity, and

• Simplify the tax system

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Sasol’s capabilities

Sasol is well positioned to unlock Mozambique’s resource potential due to

our track record with partners, competitive technology and market position

in the region

● Our integrated value chain involves

aligning our diverse and interdependent

businesses

● At the heart of our integrated value

chain, which sets us apart from our

competitors, is our ability to develop and

commercialise technology at scale to

produce bulk fuel and chemical products

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Commercialisation of Fischer-Tropsch (FT) technology: coal-to-liquids (CTL) – Sasolburg and Secunda

• Over 60 years ago, we pioneered the commercial application of converting low-

grade coal to produce liquid fuels, gas and chemicals

• 1950: oil-from-coal plant construction started in Sasolburg

• Plant based on FT process to produce petrol, diesel, lubricants, chemicals

and waxes

• 1980s: 160 000 b/d Sasol 2 and Sasol 3 facilities commercialised in Secunda

Sasol 1, Sasolburg, 1950 Sasol Secunda, 2012

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Deployment of GTL technology through proprietary technology – ORYX GTL, Sasol’s GTL flagship

In operation and highly successful

● Joint venture between Qatar Petroleum

(51%) and Sasol (49%)

● 32 400 bbl/d design capacity, producing

ultra-low sulphur diesel, naphtha and

LPG

● Continues to achieve new production

records and is consistently producing

above its design capacity of 32 400 bpd

● Highly profitable venture with handsome

returns to shareholders

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Sasol, through partnerships, is well positioned to grow its footprint in Mozambique

Sasol’s unique combination of capabilities enabled by effective partnerships

has demonstrated our ability to unlock significant benefit for all stakeholders

● Strategic and sustainable partnerships ● Expertise and technology transfer ●

Conducive environment for investment

● Gas

● Condensate

● (Oil)

● (Coal)

● Central processing facility

● Pipeline

● Power plant

● Base load – RSA

● Domestic markets

● Diversification

Resources Markets

Foundation

Infrastructure

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Ten years ago, through strong in-country partnerships, Sasol developed the Temane and Pande gas fields

• 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 socio-

economic 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 The cumulative direct contribution to the Mozambique

government over the first 10 years is US$616m 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

0

1 000

2 000

3 000

4 000

5 000

FY04 FY06 FY08 FY10 FY12 FY14 FY16 FY18 FY20 FY22

Cumulative contribution


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

Local suppliers used on construction of power plant at Ressano Garcia

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Our growth over the last decade has been based on strategic partnerships

• 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

Central Processing Facility, Mozambique PeSS petrol station in Maputo

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A decade of partnering to develop and enable 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

• Partnership between Sasol New Energy and EDM for a US$246m, 140 MW-capacity

gas engine project – due to be operational second half of 2014 calendar year

• This will be the first long-term large-scale gas to power plant in the country

Gas reticulation in Inhambane Province

Mangugumete clinic, Temane Learners at Mabote vocational school

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Developing the domestic gas market over the past decade

Royalty gas from the Sasol operated gas fields has successfully stimulated

a nascent domestic gas market

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 (

mill

ion

s)

5% gas royalty entitlement analysis – GJ

Natural gas in kind In cash

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… resulted in a cross border value chain enabled by established markets in South Africa

domestic markets now maturing

South Africa

Sasol

Secunda

Sasol

Sasolburg

3rd parties

RSA

● 50% Sasol Gas

● 25% iGas

● 25% Companhia

Moçambicana de Gasoduto

Sasol Gas

Mozambique

Central Processing

Facility

Pande

Temane

Natural

gas fields

183 MGJ/a

PPA

● 70% Sasol Petroleum Temane

● 25% Companhia Moçambicana

de Hidrocarbonetos S.A.

● 5% International Finance

Corporation

Royalty

gas

ROMPCO pipeline Ressano

Garcia

In development

Sasol

New Energy 3rd parties


We are also investigating the upside potential of our current producing licence in the Petroleum Production Agreement (PPA) area and have completed a 2D seismic campaign in onshore licence Area A

Central Processing Facility, Mozambique

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Enabled and sustained by a decade of appraisal and exploration

Pande/Temane

PPA

1 728 km2

SPI Equity 70%

CMH 25%; IFC 5%

Status: Production

PSA

1 792 km2

SPI Equity 100%

Status: Appraisal

Area A

8 400 km2

SPI Equity 90%

ENH 10%

Status: Exploration

Sofala

5 752 km2

SPI Equity 85%

ENH 15%

Status: Exploration

Block 16/19

2 965 km2

SPI Equity 50%

Petronas 35%;

ENH 15%

Status: Exploration

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Forecast

Over US$2 billion committed to meet growing market demand

Project

Beneficial

operations 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

0

100

200

300

400

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

mm

scf/

d

PPA production volumes Equity share, risked

Mozambique (PPA)

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PSA licence... building on initial foundation to meet evolving market demand into the next decade

• 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 of 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)

• Field development plan in progress – on track for delivery February 2015

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Our next exploration focus is Area A

• 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 on 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

Grudja G-6


Sasol’s strong partnerships and experience in gas monetisation in the region open up opportunities in both the Mozambique and Rovuma Basins

Sasol Gas Power Plant

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Experience in gas monetisation in the region

Our portfolio of downstream gas commercialisation options matches our

resource estimates and includes power, chemicals and piped gas

• At the heart of our integrated value chain, which sets us apart from our

competitors, is our ability to develop and commercialise technology at scale

to produce bulk fuel and chemical products

• Based on this, and on our experience in gas monetisation in the region, we

are actively pursuing monetisation avenues, not just in the Mozambique

Basin, but also in terms of the Rovuma Basin gas

• The Rovuma discoveries are large enough to support gas monetisation

options in addition to LNG

Chemicals plant Gas to power plant


Sasol is driving development of expertise, skills and promoting local suppliers

Clara José is a student at Mabote vocational school

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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:

• A 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,

a structured programme to develop sought-

after artisans in the fields of electrical,

instrumentation, mechanical fitting and

production

- spend to date: US$5 million

• Leveraging Sasol’s university collaboration

approach to build the necessary value adding

capabilities within Mozambican universities Signing of the MoU – University collaboration initiative

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…and local content

• Initial natural gas project: worked with suppliers of goods and services in terms of a

project funded by the World Bank to identify gaps and develop their safety systems in

order to qualify as suppliers

• CPF expansion: of the total cost of US$224 million, US$64 million spent with local

suppliers

• 100% local suppliers used for social projects

• We have now implemented a new supply chain strategy which focuses on:

• Preferential procurement: giving preference to Mozambican businesses wherever

possible without compromising on safety and quality standards or on performance

• Supplier development: fast tracking and assisting small- to medium-sized businesses

in-country to build capacity so they can compete with international companies

Mabote vocational school Local suppliers used on construction of power plant at Ressano Garcia

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Looking ahead to the next decade

● Pursue exploration

activities

● Optimise current assets

● Explore additional

opportunities to monetise

natural gas in country

● Explore for partnership

opportunities 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

our

heartland

Licence to thrive


Thank you

the monetisation opportunity: a decade of adding value in mozambique - i hill (24 june 2014)

Presentations & Public Speaking

certain statements

challenges mozambique

energy value chain

forecasts of future

northern mozambique

actual results

future events

list of factors