2005-10-11,+Madunas+role+in+Sasol+plus+Natref,+Lourens,+B+Day


 * Business Day, Johannesburg, Front Page, 10 October 2005**

= Maduna’s role in Sasol fuel wars in focus =


 * Carli Lourens, Trade and Industry Editor**

SASOL enlisted the services of its empowerment consultant, former justice and minerals and energy minister Penuell Maduna, last year to lobby government to block fuel imports by its rivals, the Competition Tribunal has heard.

Maduna asked then minerals and energy minister Phumzile Mlambo-Ngcuka, in a letter on behalf of Sasol, to raise the cost to imported fuel 10%. The aim of the hike was to force Sasol’s rivals to buy more fuel from it.

This emerged on Friday from the tribunal hearing into a proposed merger between Engen and Sasol’s liquid fuels division to form SA’s largest fuel company, Uhambo Oil.

All major fuel companies operating in SA, BP, Shell, Chevron and Total, as well as BP empowerment partner Masana, are opposing the merger.

Under cross-examination by legal representatives for Masana, Sasol Oil MD Ernst Oberholster confirmed that the letter represented a request by Sasol for government to restrict imports.

Sasol said in the letter that imports had been rising despite Sasol’s ability to supply more fuel to these companies.

Most oil companies typically buy fuel from Sasol.

Sasol also came under fire on Friday for allegedly engaging a government official “behind the scenes” to convince him to withdraw a minerals and energy department intervention aimed at blocking the merger.

The intervention was submitted by chief director of hydrocarbons Nhlanhla Gumede to the Competition Commission a few months ago.

Oberholster said on Friday that Sasol had consulted the minerals and energy department about the merger throughout the process, and that it had been positively received.

He said the intervention came “out of the blue”.

Gumede withdrew the application after Sasol met him.

Sasol had prepared information for Gumede to provide to the media, in case Gumede was asked about the withdrawal.

From: http://www.businessday.co.za/articles/topstories.aspx?ID=BD4A100256


 * Business Day, Johannesburg, Company News, 10 October 2005**

= Sasol may be forced to sell Natref stake =


 * Carli Lourens, Trade and Industry Editor**

THE Competition Tribunal may force Sasol to sell a 13,6% stake in the Natref inland refinery after it emerged that the Competition Commission had given its nod for a merger between Sasol’s liquid fuels division and Engen based on an incorrect understanding that this would happen automatically.

Sasol had informed the commission during its investigation of the merger a few months ago that Total was legally obligated to increase its 36,4% stake in Natref to 50%.

Sasol Oil MD Ernst Oberholster told the tribunal during cross-examination on Friday that Sasol had been under the impression that Total had a legal obligation to this end.

Sasol’s share of Natref would have formed an important part of the commission’s calculation of the proposed merged entity’s share of national fuel production capacity.

Total has, however, declined to exercise the pre-emptive right it had to increase its stake in the refinery to 50%, saying that the price was too high. The price had been determined by a third party.

Oberholster said Sasol sought legal advice, and found that Total was entitled not to exercise its option. This meant that the merged entity would have a larger share of fuel production in SA than the commission assumed it would have.

The merged group, Uhambo Oil, is expected to own about half of SA’s fuel production capacity. This will be the largest fuel company in SA with revenue of about R33bn a year.

The commission asked Oberholster in cross-examination on Friday whether Uhambo would be willing to sell the 13,6% stake to another oil company.

Oberholster said Sasol would consider this, but warned that “there would be difficulties”. Oberholster said Total would still have a pre-emptive right to the 13,6% stake in question.

Legal representatives for the commission said that the misunderstanding would not lead to a reversal of the commission’s recommendation for the merger to be approved.

The matter could be dealt with as part of the tribunal’s decision, they suggested.

Total’s expected increased stake in Natref was one of two “structural” remedies the commission assumed would take place.

The other was government’s plan to build a new pipeline to transport fuel and related products from the coast to inland regions by about 2010.

This would reduce or eliminate other fuel companies’ reliance on Sasol for fuel supply inland.

The commission had also approved the deal, which is ultimately subject to the tribunal’s approval, based on a set of “behavioural” remedies dictating Uhambo’s fuel supply to rivals.

The oil companies opposing the merger — BP, Shell, Chevron and Total — have dismissed these as inadequate to address their concerns over Uhambo’s dominance in fuel production and retailing in SA.

From: http://www.businessday.co.za/articles/companies.aspx?ID=BD4A100396