Johannesburg
– Energy giant Sasol says it has entered into hedges to mitigate financial
risks next year, which covers the oil price.
In a statement issued on Thursday, the listed company says it
has hedged against downside risks to the price of crude oil.
Crude oil is currently at $53.30 a barrel, while the The Organisation
of the Petroleum Exporting Countries and non-OPEC nations are set to meet in Vienna on Saturday to
sign an agreement around supply of the liquid.
This should see oil prices stabilising at between $60-70 per
barrel following a global oil pact reached last week.
Sasol has entered into oil put options, for the second
quarter of the financial year ending to end June 2017, which provides it with
an average Brent crude oil price floor of $48.68 per barrel (net of costs) for
about 7.6 million barrels.
Sasol to cap project costs
The company adds it has also entered into put options for quarter
three and a part of quarter four of financial year 2017 which provide it with
an average Brent crude oil price floor of $47.06 per barrel (net of costs) for about
16.8 million barrels.
Sasol explains it has a board-approved policy on hedging of
financial risks, which allows it to mitigate specific risks and provide
protection against unforeseen movements in interest rates, currency movements,
commodity and final product prices.
The listed company adds it is currently reviewing other
commodity and currency hedges and, should it enter into material hedges, “an
appropriate announcement will be made”.