2 July 2018

Mozambique: Government Orders Suspension of Sasol Tender

Photo: Sasol
Sasol fuel station.

Maputo — The Mozambican government has ordered the suspension of a tender launched by the South African petro-chemical giant Sasol, because it prioritised foreign companies, according to a report carried by the independent television station STV.

The tender, launched on 8 June, was for the hire of logistical services, including the daily transport of about 3,000 barrels of light oil, which Sasol intends to produce in Inhassoro district, in the southern province of Inhambane.

The Minister of Mineral Resources and Energy, Max Tonela, said that, by prioritising foreign companies, Sasol was in violation of Mozambican legislation. The law envisages that, for this type of business opportunity, the regulatory agency, the National Petroleum Institute (INP), should be consulted, and the procurement procedures should be transparent to give Mozambican companies the chance to compete.

"The tender includes the alternative transport of light oil by truck", noted Tonela. "These are opportunities which should first be given to Mozambican companies. That is the principle that the government defends".

Thus a letter had been sent, via the INP to Sasol, instructing it to suspend the tender and asking it to act in accordance with Mozambican law.

This is just the latest incident in a poor relationship between the government and Sasol. Tonela declared that the government is not satisfied with the South African company's performance.

In 2017, Sasol informed the government that it had purchased goods and services valued at 107 million US dollars from local companies, but a check undertaken by the government showed that, in reality, most of these suppliers were foreign.

"We don't feel Sasol's insertion in the communities where it is developing its projects, or in the country as a whole", said Tonela. Sasol's exploitation of the natural gas in Inhambane "is not making the contribution it could make to our economy".

The Minister added that, over the last two weeks, "we had meetings with the top management of Sasol, at which we expressed our dissatisfaction at the performance of the project, particularly because this is a company which has been operating here for 14 years".

Sasol has been exploiting, treating and distributing natural gas from the Pande and Temane fields since 2004. Most of the gas goes by pipeline to Sasol's chemical plants in the town of Secunda in South Africa. But some is used to generate power in Mozambique, and to supply industries in the Greater Maputo area.

In 2016, the government approved SASOL's plans for the production of light oil in Inhassoro.

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