Sasol have released results this morning at face value look OK, the dividend was cut in response to lower energy prices, that is understandable. They do however say that they expect oil prices to remain lower for longer, echoing what we heard from Impala Platinum last week, we are in an environment of lower prices for longer, when it comes to commodity prices. Without sticking their necks out too far, the expectations are for oil prices to remain low until the end of the 2017 calendar year. The truth is that nobody really knows, a major supply disruption or suddenly heightened conflict in an oil rich region may send the prices higher. US shale producers have been racking up a lot of debt, there is no doubt a lot of consolidation that will take place in the oil and gas sector across the smaller independent companies in North America in an attempt to "stay alive", I mean that in a business sense.
Sasol aim to continue to cut costs, their headcount has reduced significantly over the last year, the company is responding to the lower prices as a matter of urgency. They have secured funding for 80 percent of the massive company changing Lake Charles project, this needs to be watched like a hawk until completion. I hope that the cost of funding does not rise significantly in this low oil and weak Rand environment, most specifically in Rand terms. I guess it has already, it must have. And lest we forget that rates are going to rise over the course of the project, albeit slowly. Our clients know our view on this company, we will continue to monitor it.