South African energy and chemicals group Sasol said Thursday it is progressing with plans to divest its interest in the Arya Sasol joint venture in Iran and is currently in contact with a number of interested buyers.
Sasol announced in November 2011 that it was exiting Arya Sasol Polymer Co., the 50-50 joint venture it formed in 2003 with Iran's state-owned National Petrochemical Co.
"We continue to engage with a number of interested parties who include business and government stakeholders," Sasol's Chief Financial Officer Christine Ramon said in a release.
Arya Sasol operates an ethane-fed plant that is designed to produce 1 million mt/year of ethylene, supplied to a 300,000 mt/year low density polyethylene and 300,000 mt/year medium and high density PE plant.
Sasol had previously said it had terminated its purchases of Iranian oil following the US and EU economic sanctions aimed at persuading the Islamic Republic to halt its uranium enrichment work. Iran says it wants to develop nuclear power for electricity but the West suspects that Tehran wants to build nuclear weapons
Sasol had until recently received around 12,000 b/d from Iran, representing roughly 20% of the company's crude requirement for processing at the 108,500 b/d Natref refinery it jointly owns with state company PetroSA.
TALISMAN NOT PROCEEDING WITH CANADA GTL FEED PHASE
Sasol said Talisman will not be participating in the Front End Engineering Design (FEED) phase for a 48,000 b/d gas-to-liquids (GTL) plant in Canada, post the feasibility study completion.
The group will finalize its assessment of the feasibility study and will take a decision on whether or not to proceed to the FEED phase in the second half of 2012.
Analysts at Citigroup said Sasol's attention will likely now move more aggressively to the GTL and ethane cracker in Lake Charles, Louisiana, where FEED decisions will be made in second half of 2012 and 2013, respectively.
Volumes at the South African Secunda plant appear on track for 7.1 million mt production in the first half of 2012, marginally above Citigroup's estimate of 7.0 million mt.
Both the Oryx GTL plant, in which Sasol has a 49% stake, and Arya Polymers plant where Sasol has 50% share are now running at 80% operating rates.
WRITE-OFFS IN MOZAMBIQUE, AUSTRALIA
In Mozambique, results of the feasibility studies on the 2008 and 2009 Njika-1 an Njika-2 gas discoveries in block 16 and 19 suggest that development is highly unlikely and $56.8 million of capitalized costs will be written off in the first half of 2012.
Equally, in Australia, Sasol's partner Woodside Petroleum failed to find hydrocarbons in the Vucko-1 well offshore the Carnarvon Basin in April 2012 which will have a negative impact of approximately $35 million, Sasol said.
Sasol's Farrel Creek and Cypress A shale gas assets in Canada are under pressure because of low gas prices and higher-than-expected drilling and completion costs, resulting in substantial losses this year. Gas production for the quarter to the end of March averaged 104,700 Mcf/day.
The company said it expects to launch a drilling campaign in Gabon in October this year, which will include two development wells over the Etame Expansion Project where Sasol has a 27.75% share.
Sasol said it expects to deliver solid operational results and increased earnings for the 2012 financial year compared to earnings of Rand 19.8 billion ($2.35 billion) in 2011.
