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TABLE OF CONTENTS
Item 18. FINANCIAL STATEMENTS

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As filed with the Securities and Exchange Commission on 9 October 2015

UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549

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FORM 20-F

Commission file number: 001-31615

Sasol Limited
(Exact name of registrant as Specified in its Charter)

Republic of South Africa
(Jurisdiction of Incorporation or Organisation)

1 Sturdee Avenue, Rosebank 2196
South Africa
(Address of Principal Executive Offices)

Bongani Nqwababa, Chief Financial Officer, Tel. No. +27 11 441 3422, Email bongani.nqwababa@sasol.com
1 Sturdee Avenue, Rosebank 2196, South Africa
(Name, Telephone, E-mail and/or Facsimile number and Address of Company Contact Person)

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Securities registered or to be registered pursuant to Section 12(b) of the Act:

*

Listed on the New York Stock Exchange not for trading or quotation purposes, but only in connection with the registration of American Depositary Shares pursuant to the requirements of the Securities and Exchange Commission.

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Securities registered pursuant to Section 12(g) of the Act: None

Securities for which there is a reporting obligation pursuant to Section 15(d) of the Act: None

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           Indicate the number of outstanding shares of each of the issuer's classes of capital or common stock as of the close of the period covered by the annual report:

651 094 716 Sasol ordinary shares of no par value
25 547 081 Sasol preferred ordinary shares of no par value
2 838 565 Sasol BEE ordinary shares of no par value

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           Indicate by check mark if the registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act.    Yes ý No o

           If this report is an annual or transition report, indicate by check mark if the registrant is not required to file reports pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934.    Yes o No ý

           Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.    Yes ý No o

           Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (§232 405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files).    Yes o No o

           Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, or a non-accelerated filer. See definition of "accelerated filer and large accelerated filer" in Rule 12b-2 of the Exchange Act. (Check one):

Large accelerated filer ý    Accelerated filer o    Non-accelerated filer o

           Indicate by check mark which basis of accounting the registrant has used to prepare the financial statements included in this filing:

U.S. GAAP o    International Financial Reporting Standards as issued by the International Accounting Standards Board ý    Other o

           If "Other" has been checked in response to the previous question, indicate by check mark which financial statement item the registrant has elected to follow.

Item 17 o    Item 18 o

           If this is an annual report, indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).    Yes o No ý

   

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PRESENTATION OF INFORMATION

        We are incorporated in the Republic of South Africa as a public company under South African Company law. Our audited consolidated financial statements for the financial years ended 30 June, 2011, 2012, 2013, 2014 and 2015 included in our corporate filings in South Africa were prepared in accordance with International Financial Reporting Standards (IFRS), as issued by the International Accounting Standards Board (IASB).

        As used in this Form 20-F:

•

"rand" or "R" means the currency of the Republic of South Africa;



•

"US dollars", "dollars", "US$" or "$" means the currency of the United States (US);



•

"euro", "EUR" or "€" means the common currency of the member states of the European Monetary Union;



•

"GBP" means British Pound Sterling, the currency of the United Kingdom (UK); and



•

"CAD" means Canadian dollar, the currency of Canada.

        We present our financial information in rand, which is our reporting currency. Solely for your convenience, this Form 20-F contains translations of certain rand amounts into US dollars at specified rates as at and for the year ended 30 June 2015. These rand amounts do not represent actual US dollar amounts, nor could they necessarily have been converted into US dollars at the rates indicated.

        All references in this Form 20-F to "years" refer to the financial years ended on 30 June. Any reference to a calendar year is prefaced by the word "calendar".

        Besides applying barrels (b or bbl) and standard cubic feet (scf) for reporting oil and gas reserves and production, Sasol applies the Système International (SI) metric measures for all global operations. A ton, or tonne, denotes one metric ton equivalent to 1 000 kilograms (kg). Sasol's reference to metric tons should not be confused with an imperial ton equivalent to 2 240 pounds (or about 1 016 kg). Barrels per day, or bpd, or bbl/d, is used to refer to our oil and gas production.

        As used in this Form 20-F:

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"bscf"means billion standard cubic feet;



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"mbbl"means thousand barrels; and



•

"mmbbl" means million barrels.

        In addition, in line with a South African convention under the auspices of the South African Bureau of Standards (SABS), the information presented herein is displayed using the decimal comma (e.g., 3,5) instead of the more familiar decimal point (e.g., 3.5) used in the UK, US and elsewhere. Similarly, a hard space is used to distinguish thousands in numeric figures (e.g., 2 500) instead of a comma (e.g., 2,500).

        All references to billions in this Form 20-F are to thousands of millions.

        All references to the "group", "us", "we", "our", "the company", or "Sasol" in this Form 20-F are to Sasol Limited, its group of subsidiaries and its interests in associates, joint arrangements and structured entities. All references in this Form 20-F are to Sasol Limited or the companies comprising the group, as the context may require. All references to "(Pty) Ltd" refers to Proprietary Limited, a form of corporation in South Africa which restricts the right of transfer of its shares and prohibits the public offering of its shares.

        All references in this Form 20-F to "South Africa" and "the government" are to the Republic of South Africa and its government. All references to the "JSE" are to the JSE Limited or Johannesburg

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Stock Exchange, the securities exchange of our primary listing. All references to "SARB" refer to the South African Reserve Bank. All references to "PPI" and "CPI" refer to the South African Producer Price Index and Consumer Price Index, respectively, which are measures of inflation in South Africa. All references to "GTL" and "CTL" refer to our gas-to-liquids and coal-to-liquids processes, respectively.

        Certain industry terms used in this Form 20-F are defined in the Glossary of Terms.

        Unless otherwise stated, presentation of financial information in this annual report on Form 20-F will be in terms of IFRS. Our discussion of business segment results follows the basis used by the President and Chief Executive Officer (the company's chief operating decision maker) for segmental financial decisions, resource allocation and performance assessment, which forms the accounting basis for segmental reporting, that is disclosed to the investing and reporting public.

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FORWARD-LOOKING STATEMENTS

        We may from time to time make written or oral forward-looking statements, including in this Form 20-F, in other filings with the United States Securities and Exchange Commission, in reports to shareholders and in other communications. These statements may relate to analyses and other information which are based on forecasts of future results and estimates of amounts not yet determinable. These statements may also relate to our future prospects, developments and business strategies. Examples of such forward-looking statements include, but are not limited to:

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statements regarding our future results of operations and financial condition and regarding future economic performance including cost containment and cash conservation programmes;



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statements regarding recent and proposed accounting pronouncements and their impact on our future results of operations and financial condition;



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statements of our business strategy, plans, objectives or goals, including those related to products or services;



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statements regarding future competition, volume growth and changes in market share in the industries and markets for our products;



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statements regarding our existing or anticipated investments (including the Lake Charles Chemicals Complex and the gas-to-liquids (GTL) projects in the United States and Uzbekistan, the GTL joint ventures in Qatar and Nigeria, chemical projects and joint arrangements in North America and other investments), acquisitions of new businesses or the disposal of existing businesses;



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statements regarding our estimated oil, gas and coal reserves;



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statements regarding the probable future outcome of litigation and regulatory proceedings and the future development in legal and regulatory matters including the legal framework we operate in;



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statements regarding future fluctuations in refining margins and crude oil, natural gas and petroleum product prices;



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statements regarding the demand, pricing and cyclicality of oil and petrochemical product prices;



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statements regarding changes in the manufacturers' fuel pricing mechanism in South Africa and their effects on fuel prices, our operating results and profitability;



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statements regarding future fluctuations in exchange and interest rates;



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statements regarding total shareholder return;



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statements regarding our plans to expand the South African retail and commercial markets for liquid fuels;



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statements regarding our current or future products and anticipated customer demand for these products;



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statements regarding acts of war, terrorism or other events that may adversely affect the group's operations or that of key stakeholders to the group; and



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statements of assumptions underlying such statements.

        Words such as "believe", "anticipate", "expect", "intend", "seek", "will", "plan", "could", "may", "endeavour" and "project" and similar expressions are intended to identify forward-looking statements, but are not the exclusive means of identifying such statements.

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        By their very nature, forward-looking statements involve inherent risks and uncertainties, both general and specific, and there are risks that the predictions, forecasts, projections and other forward- looking statements will not be achieved. If one or more of these risks materialise, or should underlying assumptions prove incorrect, our actual results may differ materially from those anticipated in such forward-looking statements. You should understand that a number of important factors could cause actual results to differ materially from the plans, objectives, expectations, estimates and intentions expressed in such forward-looking statements. These factors include among others, and without limitation:

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the outcomes in pending and developing regulatory matters and the effect of changes in regulation and government policy;



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the political, social and fiscal regime and economic conditions and developments in the world, especially in those countries in which we operate;



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the outcomes of legal proceedings;



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our ability to maintain key customer relations in important markets;



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our ability to improve results despite increased levels of competition;



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the continuation of substantial growth in significant developing markets;



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the ability to benefit from our capital investment programme;



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the accuracy of our assumptions in assessing the economic viability of our large capital projects;



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the capital cost of projects (including material, engineering and construction cost) and the timing of project milestones;



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our ability to obtain financing to meet the funding requirements of our capital investment programme, as well as to fund our on-going business activities and to pay dividends;



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growth in significant developing areas of our business;



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changes in the demand for and international prices of crude oil, gas, petroleum and chemical products and changes in foreign currency exchange rates;



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the ability to gain access to sufficient competitively priced gas, oil and coal reserves and other commodities;



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environmental legislation and the impact of environmental legislation and regulation on our operations and our access to natural resources;



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our success in continuing technological innovation;



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our ability to maintain sustainable earnings despite fluctuations in foreign currency exchange rates and interest rates;



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our ability to attract and retain sufficient skilled employees; and



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our success at managing the foregoing risks.

        The foregoing list of important factors is not exhaustive; when making investment decisions, you should carefully consider the foregoing factors and other uncertainties and events, and you should not place undue reliance on forward-looking statements. Forward-looking statements apply only as of the date on which they are made and we do not undertake any obligation to update or revise any of them, whether as a result of new information, future events or otherwise. See "Item 3.D—Risk factors".

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ENFORCEABILITY OF CERTAIN CIVIL LIABILITIES

        We are a public company incorporated under the company law of South Africa. Most of our directors and officers reside outside the United States, principally in South Africa. You may not be able, therefore, to effect service of process within the United States upon those directors and officers with respect to matters arising under the federal securities laws of the United States.

        In addition, most of our assets and the assets of most of our directors and officers are located outside the United States. As a result, you may not be able to enforce against us or our directors and officers judgements obtained in United States courts predicated on the civil liability provisions of the federal securities laws of the United States.

        There are additional factors to be considered under South African law in respect of the enforceability, in South Africa (in original actions or in actions for enforcement of judgements of US courts) of liabilities predicated on the US federal securities laws. These additional factors include, but are not necessarily limited to:

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South African public policy considerations;



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South African legislation regulating the applicability and extent of damages and/or penalties that may be payable by a party;



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the applicable rules under the relevant South African legislation which regulate the recognition and enforcement of foreign judgments in South Africa; and



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the South African courts' inherent jurisdiction to intervene in any matter which such courts may determine warrants the courts' intervention (despite any agreement amongst the parties to (i) have any certificate or document being conclusive proof of any factor, or (ii) oust the courts' jurisdiction).

        Based on the foregoing, there is no certainty as to the enforceability in South Africa (in original actions or in actions for enforcement of judgments of US courts) of liabilities predicated on the US federal securities laws.

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PART I

ITEM 1.    IDENTITY OF DIRECTORS, SENIOR MANAGEMENT AND ADVISERS

        Not applicable.

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ITEM 2.    OFFER STATISTICS AND EXPECTED TIMETABLE

        Not applicable.

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ITEM 3.    KEY INFORMATION

3.A    Selected financial data

        The following information should be read in conjunction with "Item 5—Operating and Financial Review and Prospects" and the consolidated financial statements, the accompanying notes and other financial information included elsewhere in this annual report on Form 20-F.

        The financial data set forth below for the years ended as at 30 June 2015 and 2014 and for each of the years in the three-year period ended 30 June 2015 has been derived from our audited consolidated financial statements included in Item 18 of this annual report on Form 20-F.

        The financial data as at 30 June 2015 and 2014 and for each of the years in the three-year period ended 30 June 2015, should be read in conjunction with, and is qualified in its entirety by reference to, our audited consolidated financial statements.

        Financial data as at 30 June 2013, 2012 and 2011, and for the years ended 30 June 2012 and 2011 have been derived from the group's previously published audited consolidated financial statements, which are not included in this document.

        The audited consolidated financial statements from which the selected consolidated financial data set forth below have been derived were prepared in accordance with IFRS.

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Exchange rate information

        The following table sets forth certain information with respect to the rand/US dollar exchange rate for the years shown:

        On 2 October 2015, the closing exchange rate of rand per US dollar as reported by Thomson Reuters was R13,73/US$1.

3.B    Capitalisation and indebtedness

        Not applicable.

3.C    Reasons for the offer and use of proceeds

        Not applicable.

3.D    Risk factors

Fluctuations in refining margins and crude oil, natural gas and petroleum product prices may adversely affect our business, operating results, cash flows and financial condition

        Market prices for crude oil, natural gas and petroleum products fluctuate as they are subject to local and international supply and demand fundamentals and factors over which we have no control. Worldwide supply conditions and the price levels of crude oil may be significantly influenced by international cartels, which control the production of a significant proportion of the worldwide supply of crude oil, and by political developments, especially in the Middle East, North Africa and Nigeria.

        The price at which we can sell fuel in South Africa is regulated by the South African government, through a mechanism, known as the Basic Fuel Price (BFP). The BFP is a formula driven price that considers, amongst others, the international crude oil price, the rand/US dollar exchange rate and the

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refining margin typically earned by coastal refineries. As a result, our turnover will be impacted by factors that may be different than if fuel were sold at prices based only on market factors. Likewise, if the crude oil price decreases, the price at which we sell fuel could decrease even if there is greater demand in South Africa. The impact of using the BFP to establish prices could have a negative impact on our operating results. The price and availability of substitute fuels, changes in product inventory, product specifications and other factors will also impact our revenue. In recent years, prices for petroleum products have fluctuated widely.

        The group's profitability was adversely impacted by the 33% decline in oil prices. During 2015, the dated Brent crude oil price averaged US$73,46/b and fluctuated between a high of US$106,64/b and a low of US$48,18/b. This compares to an average dated Brent crude oil price of US$109,40/b during 2014, which fluctuated between a high of US$117,13/b and a low of US$103,19/b.

        A substantial proportion of our turnover is derived from sales of petroleum and petrochemical products. Through our equity participation in the National Petroleum Refiners of South Africa (Pty) Ltd (Natref) crude oil refinery, we are exposed to fluctuations in refinery margins resulting from differing fluctuations in international crude oil and petroleum product prices. We are also exposed to changes in absolute levels of international petroleum product prices through our synthetic fuels and oil operations. Fluctuations in crude oil prices affect our results mainly through their indirect effect on the BFP price formula, see "Item 4.B—Business overview—"Sasol Oil", as well as the impact on oil derived feedstock. Prices of petrochemical products and natural gas are also affected by fluctuations in crude oil prices.

        We use derivative instruments to partially protect us against day-to-day fluctuations in US dollar oil prices as well as in the rand to US dollar exchange rate which affects the acquisition cost of our crude oil needs. See "Item 11—Quantitative and qualitative disclosures about market risk". While the use of these instruments may provide some protection against short-term fluctuations in crude oil prices, it does not protect us against longer term fluctuations in crude oil prices or differing trends between crude oil and petroleum product prices.

        Prolonged periods of low crude oil and natural gas prices, or rising costs, could also result in projects being delayed or cancelled, as well as in the impairment of certain assets. In Canada, low gas prices have continued to persist resulting in a partial impairment of our shale gas assets in 2014 of R5,3 billion and a further impairment of R1,3 billion in 2015. We have also recognised a partial impairment in 2015 of R1,3 billion with respect to our Etame assets in Gabon, due to the decline in oil prices.

        We are unable to accurately forecast fluctuations in refining margins and crude oil, natural gas and petroleum products prices. Fluctuations in any of these may have a material adverse effect on our business, operating results, cash flows and financial condition.

Fluctuations in exchange rates may adversely affect our business, operating results, cash flows and financial condition

        The rand is the principal functional currency of our operations and we report our results in rand. However, a large part of our group's turnover is denominated in US dollars and some part in euro, derived either from exports from South Africa or from our manufacturing and distribution operations outside South Africa. Approximately 90% of our turnover is impacted by the US dollar as petroleum prices in general and the price of most petroleum and chemical products are based on global commodity and benchmark prices which are quoted in US dollars.

        Further, as explained above, the rand/US dollar exchange rate is a component of the BFP, which impacts the price at which we can sell fuel in South Africa.

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        A significant part of our capital expenditure is also US dollar-denominated, as it is directed to investments outside South Africa or constitutes materials, engineering and construction costs imported into South Africa. The majority of our operating costs are either rand based for South African operations, US dollar based for our operations in the United States or euro based for European operations. Accordingly, fluctuations in exchange rates between the rand and US dollar and/or euro may have a material effect on our business, operating results, cash flows and financial condition.

        Fluctuations in the exchange rates of the rand against the US dollar and euro as well as other currencies also impact the comparability of our financial statements between periods due to the effects of translating the functional currency of our foreign subsidiaries into rand at different exchange rates. Accordingly, some of the changes in the reported operating results are attributable to fluctuations in exchange rates and do not necessarily reflect the underlying operating results. During 2015, the rand/US dollar exchange rate averaged R11,45 and fluctuated between a high of R12,58 and a low of R10,51. This compares to an average exchange rate of R10,39 during 2014 which fluctuated between a high of R11,32 and a low of R9,59. The rand exchange rate is affected by various international and South African economic and political factors. Subsequent to 30 June 2015, the rand has on average weakened against the US dollar and the euro. In general, a weakening of the rand would have a positive effect on our operating results. Conversely strengthening of the rand would have an adverse effect on our operating results. Refer to "Item 5A—Operating results" for further information regarding the effect of exchange rate fluctuations on our results of operations.

        Although the exchange rate of the rand is primarily market-determined, its value at any time may not be an accurate reflection of its underlying value, due to the potential effect of, among other factors, exchange controls. For more information regarding exchange controls in South Africa see "Item 10.D—Exchange controls".

        We use derivative instruments to partially protect us against adverse movements in exchange rates in accordance with our group hedging policies. See "Item 11—Quantitative and qualitative disclosures about market risk".

Cyclicality in petrochemical product prices and demand may adversely affect our business, operating results, cash flows and financial condition

        The demand for chemicals and especially products such as solvents, olefins, surfactants, fertilisers and polymers is cyclical. Typically, higher demand during peaks in the industry business cycles leads producers to increase their production capacity. Although peaks in the business cycle have been characterised by increased selling prices and higher operating margins in the past, such peaks have led to overcapacity with supply exceeding demand growth. Low periods during the industry business cycle are characterised by a decrease in selling prices and excess capacity, which can depress operating margins. Lower prices for chemical products during downturns in the industry business cycle may have a material adverse effect on our business, operating results, cash flows and financial condition.

        We are unable to accurately forecast fluctuations in petroleum product prices, which may have a material adverse effect on our business, operating results, cash flows and financial condition.

We may not be able to exploit technological advances quickly and successfully or competitors may develop superior technologies

        Most of our operations, including the gasification of coal and the manufacture of synfuels and petrochemical products, are highly dependent on the use of advanced technologies. The development, commercialisation and integration of the appropriate advanced technologies can affect, among other things, the competitiveness of our products, the continuity of our operations, our feedstock requirements and the capacity and efficiency of our production.

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        It is possible that new technologies or novel processes may emerge and that existing technologies may be further developed in the fields in which we operate. Unexpected advances in employed technologies or the development of novel processes can affect our operations and product ranges in that they could render the technologies we utilise or the products we produce obsolete or less competitive in the future. Difficulties in accessing new technologies may impede us from implementing them and competitive pressures may force us to implement these new technologies at a substantial cost.

        Examples of new technologies which may in the future affect our business include the following:

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The development and commercialisation of non-hydrocarbon-dependent energy carrier technologies, including the further development of fuel cells and batteries, or the large-scale broadening of the application of electricity to drive motor vehicles. These may be disruptive to the use of hydrocarbon and refined crude oil-derived fuels;



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The development of improved fuels (and associated automotive technologies) from a crude oil base with equivalent properties to that of Fischer-Tropsch derived fuels, which may erode the competitive advantage of Fischer-Tropsch fuels;



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The development of efficient distribution and gas storage systems that allow light hydrocarbons to be competitively used for mobility and transportation, effectively displacing diesel; and



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The development by competitors of next generation catalysts in which catalyst performance is improved, resulting in highly selective and high purity chemical products, which may render the use of our mixed feed stream catalytic-based production processes uncompetitive.

        We cannot predict the effect of these or other technological changes or the development of new processes on our business or on our ability to provide competitive products. Our ability to compete will depend on our timely and cost-effective implementation of new technological advances. It will also depend on our success in commercialising these advances irrespective of competition we face.

        In addition to the technological challenges, a number of our expansion projects are integrated across a number of Sasol businesses. Delays with the development of an integrated project might, accordingly, have an impact on more than one Sasol business.

        If we are unable to implement new technologies in a timely or cost-efficient manner, or penetrate new markets in a timely manner in response to changing market conditions or customer requirements, we could experience a material adverse effect on our business, operating results, cash flows and financial condition.

Our large capital projects may not prove sufficiently viable or as profitable as planned and may be affected by delays or cost overruns

        We have constructed gas-to-liquids (GTL) plants in Qatar and Nigeria as well as the first phase of the Fischer-Tropsch Wax Expansion Project (FTWEP) in Sasolburg. During the 2015 financial year, we made the final investment decision on the Lake Charles Chemical Project (LCCP) (an ethane cracker and chemical derivatives plant) and started detailed engineering and infrastructure work. In Mozambique, we submitted a field development plan (FDP) for the Production Sharing Agreement (PSA) licence area to the regulatory authorities. The PSA FDP proposes an integrated oil, Liquefied Petroleum Gas (LPG) and gas project adjacent to the Petroleum Production Agreement (PPA) area. A further update on the investment strategy and monetisation plan will be provided once approval has been received from the relevant authorities in Mozambique. The development of these projects is a capital-intensive process carried out over long durations and requires us to commit significant capital expenditure and devote considerable management resources in utilising our existing experience and know-how.

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        In assessing the viability of our projects, we make a number of assumptions relating to specific variables, mainly including, but not limited to:

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relative and absolute prices of crude oil, gas, petroleum and chemical products;



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fluctuations in the exchange rate of the US dollar and other currencies against the rand;



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fluctuations in interest rates;



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access to sufficient competitively priced gas reserves;



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sales opportunities and risks in the relevant countries;



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government incentives in the countries in which we invest;



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capital and operational costs of our facilities;



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technology and catalyst performance; and



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conditions in the countries in which we operate or plan to operate, including factors relating to political, social and economic conditions.

        Such projects are subject to risks of delay and cost overruns inherent in any large construction project, including costs or delays resulting from the following:

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scarcity of skilled labour and other personnel necessary to perform the work;



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unexpected delays in delivery times, shortages or unforeseen increases in the cost of equipment, labour and raw materials;



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unforeseen design and engineering problems, including those relating to the commissioning of newly designed equipment;



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work stoppages and labour disputes;



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delays in, or inability to obtain, access to financing;



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failure or delay of third-party service providers and disputes with suppliers;



•

changes to regulations affecting the facilities, such as environmental regulations and construction standards;



•

adverse weather conditions; and



•

defective construction and the resultant need for remedial work.

        Significant variations in any one or more of the above factors or any other relevant factor, may adversely affect the profitability or even the viability of our investments. In view of the resources invested in these projects and their importance to our growth strategy, problems we may experience as a result of these factors may have a material adverse effect on our business, operating results, cash flows, financial condition and opportunities for future growth.

Exposure related to investments in associates, joint ventures and joint operations may adversely affect our business, operating results, cash flows and financial condition

        We have invested in a number of associates, joint ventures and joint operations as part of our strategy to expand operations globally. We are considering opportunities for further upstream oil and gas and downstream GTL investments, as well as opportunities in chemicals, to continue our local and global expansion. The development of these projects may require investments in associates, joint ventures and joint operations, most of which are aimed at facilitating entry into countries and/or sharing risk with third parties. Although the risks are shared, the objectives of associates, joint venture

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and joint operation partners, their ability to meet their financial and/or contractual obligations, their behaviour, their compliance with legal and ethical standards, as well as the increasing complexity of country specific legislation and regulations may adversely affect our reputation and/or result in disputes and/or litigation, all of which may have a material adverse effect on our business, operating results, cash flows and financial condition, and may constrain the achievement of our growth objectives.

We may not achieve projected benefits of acquisitions or divestments

        We may pursue strategic acquisitions or divestments. With any such transaction there is the risk that any benefits or synergies identified at the time of acquisition may not be achieved as a result of changing or invalid assumptions or materially different market conditions, or other factors. Furthermore, we could be found liable, regardless of extensive due diligence reviews, for past acts or omissions of the acquired business without any adequate right of redress.

        In addition, delays in the sale of assets, or reductions in value realisable, may arise due to changing market conditions. Failure to achieve expected values from the sale of assets, or delays in expected receipt or delivery of funds may result in higher debt levels, underperformance of those businesses and possible loss of key personnel.

We may face constraints in obtaining the expected level of financing to pursue new business opportunities or support existing projects

        In December 2014, in response to the low oil price environment, we started to formulate a comprehensive Response Plan to conserve cash. We set ourselves a cash conservation target range of R30 billion to R50 billion over 30 months from 31 December 2014. One of the levers of the Response Plan is to conserve cash of between R13 billion to R22 billion through capital portfolio phasing and reductions. We revised our forecasted capital expenditure for the 2015 financial year from R50 billion to R45 billion. Actual capital expenditure (cash flow) during the year amounted to R45,1 billion. As a result of the weakening rand against the US dollar, we updated our capital expenditure forecast for 2016 to R70 billion and to R65 billion for 2017.

        Our capital expenditure plans and requirements are subject to a number of risks, contingencies and other factors, some of which are beyond our control, and therefore the actual future capital expenditure and investments may differ significantly from the current planned amounts.

        Our operating cash flow and banking facilities may be insufficient to meet all of these expenditures, depending on the timing and cost of development of these and other projects, as well as our operating performance and the utilisation of our banking facilities. Refer to "Item 18—Financial Statements—note 18" for a breakdown of our banking facilities and the utilisation thereof. As a result, new sources of capital may be needed to meet the funding requirements of these projects, to fund ongoing business activities and to pay dividends. In addition, should we decide to proceed with any further projects in the United States, we will need to obtain external financing to fund such projects. To date, we have secured 80% of the funding required for the construction of the LCCP. Our ability to raise and service significant new sources of capital will be a function of macroeconomic conditions, our credit rating, our gearing and other debt metrics, the condition of the financial markets, future prices for the products we sell, the prospects for our industry, our operational performance and operating cash flow and debt position, among other factors.

        Our credit rating may be affected by our ability to maintain our outstanding debt and financial ratios at levels acceptable to the credit ratings agencies, our business prospects, the sovereign credit rating of the Republic of South Africa and other factors, some of which are outside our control. Historically, our credit rating has been affected by movements in the sovereign credit rating of the Republic of South Africa and any future adverse rating actions or downgrade of the South African sovereign credit rating may have an adverse effect on our credit rating, which could negatively impact

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our ability to borrow money and could increase the cost of debt finance. The sovereign credit rating of the Republic of South Africa was downgraded by Standard & Poor's Ratings Services (S&P) in 2014 from BBB to BBB–. The outlook is currently stable. The Moody's Investors Service (Moody's) rating of the Republic of South Africa is Baa2, with a stable outlook. Sasol's credit rating was not impacted by the recent change in the sovereign credit rating of the Republic of South Africa.

        In the event of unanticipated operating or financial challenges, any dislocation in financial markets, any further downgrade of our ratings by ratings agencies or new funding limitations, our ability to pursue new business opportunities, invest in existing and new projects, fund our ongoing business activities and retire or service outstanding debt and pay dividends, could be constrained, any of which could have a material adverse effect on our business, operating results, cash flows and financial condition.

There are country-specific risks relating to the countries in which we operate that could adversely affect our business, operating results, cash flows and financial condition

        Several of our subsidiaries, joint ventures and associates operate in countries and regions that are subject to significantly differing political, social, economic and market conditions. See "Item 4.B—Business Overview" for a description of the extent of our activities in the main countries and regions in which we operate. Although we are a South African-domiciled company and the majority of our operations are located in South Africa, we also have significant energy businesses in other African countries, chemical businesses in Europe, the United States, the Middle East and Asia, a joint venture in a GTL facility in Qatar, joint arrangements in the United States, Canada and Uzbekistan and an economic interest in a GTL project in Nigeria.

        Particular aspects of country-specific risks that may have a material adverse impact on our business, operating results, cash flows and financial condition include:

(a)   Political, social and economic issues

        We have invested, or are in the process of investing in, significant operations in African, European, North American, Asian and Middle Eastern countries that have in the past, to a greater or lesser extent, experienced political, social and economic uncertainty. Government policies, laws and regulations in countries in which we operate, or plan to operate, may change in the future. The impact of such changes on our ability to deliver on planned projects cannot be ascertained with any degree of certainty and such changes may therefore have an adverse effect on our operations and financial results.

(b)   Fluctuations in inflation and interest rates

        Macroeconomic factors, such as higher inflation and interest rates, could adversely impact our ability to contain costs and/or ensure cost-effective debt financing in countries in which we operate.

        Our sustainability and competitiveness is influenced by our ability to optimise our operating cost base. As we are unable to control the market price at which the products we produce are sold, it is possible that if inflation in countries in which we operate should begin to increase, it may result in significantly higher future operational costs.

        In South Africa, consumer price inflation decreased to 5,1% in 2015 from 6,1% in 2014. Following the decline in the oil price, domestic consumer price inflation trended lower into the early part of the 2015 calendar year. However, upside risks to the inflation outlook prompted the South African Reserve Bank (SARB), to increase the policy interest rate by 25 basis points in July 2015.

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        The rand/US dollar exchange rate remains one of the factors having a significant impact on inflation, and, accordingly the weakening of the rand over the past few years poses a risk to the inflation outlook.

        It is expected that rand weakness and rising inflation could see the SARB lifting interest rates further in the coming months. Producers' pricing power appears relatively limited in a weak economic growth environment, but it is unclear how long producers will still be able to absorb cost increases.

(c)   Transportation, water, electricity and other infrastructure

        The infrastructure in some countries in which we operate, such as rail infrastructure, electricity and water supply may need to be further upgraded and expanded, and in certain instances, possibly at our own cost. Water, as a resource, is becoming increasingly limited as world demand for water increases. In South Africa, the risk that water may become significantly limited is exacerbated by the fact that it is one of the drier countries in the world. Water use by our operations varies widely depending largely on feedstock and technology choice. While a GTL plant is typically a net producer of water, a CTL plant has a significant water requirement, driven by the need to produce hydrogen and additional cooling requirements. Although various technological advances may improve the water efficiency of our processes, we may experience limited water availability and other infrastructural challenges, which could have a material adverse effect on our business, operating results, cash flows, financial condition and future growth.

        In South Africa, the supply of electricity will remain extremely tight into 2019 and 2020, until substantial new generation capacity is commissioned. Sasol has an installed generation capacity of approximately 70% of its total South African power supply needs internally, and hence has a limited exposure. Although Eskom has implemented a number of short- and long-term mitigation plans, we could experience power supply interruptions which could have material adverse effects on our business, operating results, cash flows, financial condition and future growth.

(d)   Disruptive industrial action

        The majority of our employees worldwide belong to trade unions. These employees comprise mainly general workers, artisans and technical operators. The South African labour market remains volatile and characterised by major industrial action in key sectors of the economy.

        Wage negotiations impacting the South African operations of the Sasol Group within the Petroleum and Industrial Chemicals sectors have been concluded. Although we have constructive relations with our employees and their unions, we cannot assure you that significant labour disruptions will not occur in the future or that our labour costs will not increase significantly in the future.

(e)   Exchange control regulations

        South African law provides for exchange control regulations which apply to transactions involving South African residents, including both natural persons and legal entities. These regulations may restrict the export of capital from South Africa, including foreign investments. The regulations may also affect our ability to borrow funds from non-South African sources for use in South Africa, including the repayment of these borrowings from South Africa and, in some cases, our ability to guarantee the obligations of our subsidiaries with regard to these funds. These restrictions may affect the manner in which we finance our transactions outside South Africa and the geographic distribution of our debt. See "Item 10.D—Exchange controls" and "Item 5.B—Liquidity and capital resources".

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(f)   Localisation issues

        In some countries, our operations are required to comply with local procurement, employment equity, equity participation, corporate social responsibility and other regulations which are designed to address country-specific social and economic transformation and localisation issues.

        In South Africa, there are various transformation initiatives with which we are required to comply. We embrace, engender and participate in initiatives to bring about meaningful transformation in South Africa. We consider these initiatives to be a strategic imperative and we acknowledge the risk of not pursuing them.

        The President of the Republic of South Africa originally gazetted the revised Codes of Good Practice for broad-based black economic empowerment (B-BBEE) the "Revised Codes" on 11 October 2013, with a transition period until 30 April 2015.

        The Revised Codes became effective on 1 May 2015. These codes provide a standard framework for the measurement of B-BBEE across all sectors of the economy, other than sectors that have their own sectorial transformation charters (e.g. the mining industry). The B-BBEE Amendment Act was assented on 27 January 2014.

        The Revised Codes provide more stringent targets which will have an impact on Sasol's current B-BBEE contributor status. The more stringent targets comprise both increased pillar-specific targets (For example, in preferential procurement the target for black ownership of suppliers increased from 25% to 51%) and the generic scorecard requiring more points to be obtained in order to qualify for a given level. (For example, under the previous codes, a Level 4 B-BBEE status was achieved by scoring at least 65 points, whereas under the Revised Codes, the threshold has been increased to 80). In 2015, we reported a level 4 B-BBEE contributor status. However like many other companies, we expect this to decline. We have embarked on a project to assess our B-BBEE strategies.

        We believe that the long-term benefits to the company and our country should outweigh any possible short-term adverse effects, but we cannot assure you that future implications of compliance with these requirements or with any newly imposed conditions will not have a material adverse effect on our shareholders or business, operating results, cash flows and financial condition. See "Item 4.B—Empowerment of historically disadvantaged South Africans".

(g)   Ownership rights

        We operate in several countries where ownership of rights in respect of land and resources is uncertain and where disputes in relation to ownership or other community matters may arise. These disputes are not always predictable and may cause disruption to our operations or development plans.

(h)   Stakeholder relationships

        Our operations can also have an impact on local communities, including the need, from time to time, to relocate or resettle communities or relocate infrastructure networks such as railways and utility services. Failure to manage relationships with local communities, governments and non-governmental organisations may harm our reputation as well as our ability to bring development projects into production. In addition, the costs and management time required to comply with standards of social responsibility, community relations and sustainability, including costs related to the resettlement of communities or relocation of infrastructure, have increased substantially and are expected to further increase over time.

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(i)   Other specific country risks that are applicable to countries in which we operate and which may have a material adverse effect on our business include:

•

acts of warfare and civil clashes;



•

government interventions, including protectionism and subsidies;



•

regulatory, taxation and legal structure changes;



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the control of oil and gas field developments and transportation infrastructure;



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failure to receive new permits and consents;



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cancellation of contractual rights;



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expropriation of assets;



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lack of capacity to deal with emergency response situations;



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the introduction of selective environmental and carbon taxes;



•

social and labour unrest due to economic and political factors in host countries;



•

terrorism, xenophobia and kidnapping threats; and



•

possible demands to participate in unethical or corrupt conduct that lead us to forgo certain opportunities.

        Some of the countries where we have already made, or other countries where we may consider making investments, are in various stages of developing institutions and legal and regulatory systems that are characteristic of democracies. However, institutions in these countries may not yet be as firmly established as they are in democracies in South Africa, North America and some European countries. Some of these countries are also transitioning to a market economy and, as a result, are experiencing changes in their economies and their government policies that could affect our investments in these countries.

        Moreover, the procedural safeguards of the new legal and regulatory regimes in these countries are still being developed and, therefore, existing laws and regulations may be applied inconsistently. In some circumstances, it may not be possible to obtain the legal remedies provided under those laws and regulations in a timely manner.

        As the political, economic and legal environments remain subject to continuous development, investors in these countries face uncertainty as to the security of their investments. Any unexpected changes in the political or economic conditions in the countries in which we operate (including neighbouring countries) may have a material adverse effect on the investments that we have made or may make in the future, which may in turn have a material adverse effect on our business, operating results, cash flows and financial condition.

Electricity supply interruptions and increases in electricity costs in South Africa could adversely affect our business, operating results, cash flows, financial condition and future growth

        With the recent commissioning of additional power generation equipment, Sasol has an installed generation capacity of approximately 70% of its total South African power supply needs internally. However, our South African operations remain dependent on power generated by the state-owned utility, Eskom, for their remaining power supply requirements. Currently the electricity supply system in South Africa is critically constrained due to several factors, such as significant delays with new power station build projects, insufficient maintenance opportunities on the ageing power station fleet and an increasing trend of unplanned outages forcing the country into regular load shedding or load curtailment in the residential, commercial and industrial sectors. It is expected that the current tight

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supply situation will remain until the anticipated commissioning of substantial new generation during 2019 and 2020. Although Eskom has implemented a number of short- and long-term mitigation plans, we could experience power supply interruptions which could have material adverse effects on our business, operating results, cash flows, financial condition and future growth.

        South African industrial electricity tariffs increased by 12,69% on 1 April 2015, and may increase further, pending the outcome of a public consultation process announced by the National Energy Regulator of South Africa (NERSA). Eskom applied for a selective re-opener of the current Multi-Year Price Determination (MYPD), which was rejected by NERSA. Although Eskom has not made any official announcement on its course of action, it is our understanding that they will submit a full application to NERSA for the next MYPD period. A sharp increase in electricity costs may have material adverse effects on our business, operating results, cash flows, financial condition and future growth.

We may not be in compliance with laws or regulations in the countries in which we operate

        Ethical misconduct and non-compliance with applicable laws could have a material adverse impact on our reputation, operations and authorisation to operate. Petrochemical companies need to be particularly vigilant with regard to the risk of bribery, especially when the scale of investments and the corruption perception of the countries where operations take place are considered. We, like other international petrochemical companies, have a geographically diverse portfolio and conduct operations in countries, some of which have a perceived high prevalence of corruption.

        The industry in which we operate is highly regulated and requires compliance with a myriad of laws and regulations, governing matters such as minerals and mining, trading in petroleum products and gas, as well as, safety, health and environment and competition and anti-corruption laws in our South African and global operations. Non-compliance can impact business performance adversely. Although systems and processes are in place, monitored and improved upon, to ensure compliance with applicable laws and regulations, we cannot assure you that we will be in compliance with all laws and regulations at all times. For example, non-compliance with environmental, health or safety laws may occur, among other ways, from systems or human errors in monitoring our emissions of hazardous or toxic substances into the environment, such as our use of incorrect methodologies or defective or inappropriate measuring equipment, errors in manually capturing results, or other mistaken or unauthorised acts of our employees. Any failure to comply with applicable laws and regulations could result in regulatory enforcement against us, third party claims against us for loss or injury, the imposition of civil or criminal fines or penalties, loss of our relevant licenses, the requirement for us to implement costly corrective actions, or other liabilities, any of which could have a material adverse effect on our business, operating results, cash flows and financial condition.

New South African mining legislation may have an adverse effect on our mineral rights

        Since the enactment of the Mineral and Petroleum Resources Development Act, 28 of 2002 (MPRDA), in May 2004, our subsidiary, Sasol Mining (Pty) Ltd, has been successful in converting its prospecting permits and mining authorisations to new order prospecting and mining rights in terms of the MPRDA. The mining rights in respect of the Secunda as well as the Mooikraal operations at Sasolburg are valid for 30 years (expiring during March 2040), which is the maximum allowable period under the MPRDA. In addition to the initial validity period, our converted mining rights may, on application, be renewed for further periods not exceeding 30 years each.

        If a holder of a prospecting right or mining right conducts prospecting or mining operations in contravention of the MPRDA, including the Mining Charter and Social and Labour Plans, the converted mining rights can be suspended or cancelled by the Minister of Mineral Resources. The entity, upon receiving a notice of breach from the Minister has a specific period of time to remedy such

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breach. The MPRDA and applicable provisions in the National Environmental Management Act and National Water Act impose additional responsibilities with respect to environmental management as well as the prevention of environmental pollution, degradation or damage from mining and/or prospecting activities.

        The MPRDA Amendment Bill, 2013, after initial approval by the National Assembly, was referred back to the National Assembly for reconsideration. The referral was due to concerns of the President that the Bill would not stand constitutional muster.

        Disagreement exists between the Department of Mineral Resources (DMR) and the mining industry regarding the interpretation of the ownership element of the Mining Charter. The disagreement centers around the so-called "once empowered always empowered" principle. The Minister of Mineral Resources and the mining industry agreed to obtain a declaratory order on this principle. Subsequently the Chamber of Mines lodged an application with the High Court to obtain the declaratory order. It is expected that the process can take at least 12 months before clarification is obtained. Considering Sasol Mining's Black Economic Empowerment (BEE) ownership status it is possible that the outcome of this application could have an adverse effect on Sasol Mining. The DMR is currently reviewing the Mining Charter. It is uncertain what impact the revision of the Mining Charter will have on the mining industry.

        The proposed changes to the MPRDA, the regulations to be promulgated in terms thereof and the amendments of the Mining Charter, and mining and petroleum rights in the future may have a material adverse effect on our business, operating results, cash flows and financial condition. See "Item 4.B—Business overview—Regulation of mining activities in South Africa".

New legislation in South Africa on petroleum and energy activities may have an adverse impact on our business, operating results, cash flows and financial condition

        The Petroleum Products Amendment Act (the Petroleum Act) requires persons involved in the manufacturing, wholesale and retail sale of petroleum products to obtain relevant licences for such activities. Sasol Oil, Natref and Secunda Synfuels submitted applications for their respective operations. The Sasol Oil and Secunda Synfuels wholesale and manufacturing licence applications have been approved and issued. The Natref manufacturing licence application is still under review by the Department of Energy. Nevertheless, these facilities continue to operate as being persons who, as of the effective date of the Petroleum Act, are deemed to be holders of a licence until their applications have been finalised. Until these applications have been finalised, we cannot provide assurance that the conditions of the licences may not have a material adverse impact on our business, operating results, cash flows and financial condition. See "Item 4.B—Business overview—Regulation of petroleum-related activities in South Africa".

        The South African fuel industry, inter alia through the South African Petroleum Industry Association, is involved in discussions with the South African government regarding a postponement of the 1 July 2017 introduction date of new cleaner fuels standards, (Clean Fuels 2), which are aligned to EURO V emission standards enabling fuel specifications, to reduce the environmental impact caused by vehicle emissions. These discussions are at an advanced stage, but a new target date has yet to be announced by the government. The introduction of the new specifications and standards will require capital investment in our manufacturing facilities. We cannot assure you that these new specifications will not have a material adverse effect on our business, operating results, cash flow and financial condition.

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        The 10 year regulatory dispensation negotiated with the South African government with respect to the supply of Mozambican natural gas to the South African market expired in March 2014. In accordance with the regulatory framework relating to gas prices and tariffs, NERSA has, on 25 March 2014, approved transmission tariffs and maximum gas prices which apply to our gas business in South Africa, after the expiry of the regulatory dispensation. Seven of Sasol Gas' largest customers initiated a judicial review of the NERSA decisions relating to its maximum price and tariff methodologies and NERSA's decision on Sasol Gas's maximum price application. The review application proceedings have been completed and Sasol is awaiting the judgement. We cannot assure you that the provisions of the Gas Act and the implementation of a new gas price and tariff methodology pursuant to the NERSA approvals, and the outcome of the review application, will not have a material adverse impact on our business, operating results, cash flows and financial condition. See "Item 4.B—Business overview—Regulation of gas related activities in South Africa".

Changes in safety, health and environmental regulations and legislation and public opinion may adversely affect our business, operating results, cash flows and financial condition

        We are subject to a wide range of general and industry-specific environmental, health and safety and other legislation in jurisdictions in which we operate. See "Item 4.B—Business overview—Regions in which Sasol operates and their applicable legislation".

        One of the most material challenges facing Sasol relates to our ability to anticipate and respond to the changing regulatory and policy context, particularly relating to environmental legislation in South Africa. Evolving legislation relating to air quality, climate change and waste management introduce profound regulatory challenges to our existing plants in South Africa. These laws and regulations and their enforcement are likely to become more stringent over time. Compliance with these requirements is a significant factor in our business, and we incur, and expect to continue to incur, significant capital and operating expenditures in order to continue to comply with these requirements.

        The promulgation of the South African National Environmental Management: Air Quality Act in 2004, followed by the publication of minimum emission standards for point sources in April 2010, introduced a fundamental new approach to air quality management. Accordingly, our existing plants have to meet more stringent point source standards up to 2020 as governed in terms of our atmospheric emission licences. From 2020 onwards, our plants have to comply with emission standards applicable to newly commissioned plants. These requirements, which may require retrofitting of some of our existing plants, pose significant compliance challenges for our existing plants from a technical and financial feasibility point of view.

        To mitigate these compliance risks in the short and long term, Sasol will be reliant on mechanisms available in law and associated decisions thereon by the relevant environmental authorities in instances where technical solutions have not yet been identified to timely achieve the prescribed emission limits. We are likely to submit applications for postponements, to obtain extensions on the requisite compliance time frames. Sasol remains concerned about the limitations of the postponement mechanism to provide longer-term certainty in the face of these significant compliance challenges. We may also rely on other available mechanisms, such as, implementation of air quality offsets, to address our longer term compliance challenges. However, these may not be granted or formally recognised as part of our licensing dispensations. In this regard, Sasol continues to investigate solutions that may enable us to comply over the longer term, and to conduct collaborative and constructive engagements with the Department of Environmental Affairs and other stakeholders to further highlight and resolve these challenges.

        Ongoing changes to waste management legislation in South Africa are compelling our South African operations, in collaboration with service providers, to find alternative solutions to waste management and disposal. The changing regulatory landscape introduces increasingly stringent waste

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disposal restrictions, to be phased in from August 2016. The potential costs associated with meeting these requirements are being quantified. We will be dependent on clarifying the interpretation and applicability of specific requirements to our waste streams with the regulatory authorities for purposes of determining whether there would be compliance challenges associated with technical and feasibility constraints. Sasol may have to rely on mechanisms in law, such as exemption applications, to address its potential waste management compliance challenges, the outcome of which cannot be guaranteed.

        Public opinion is growing more sensitive to community and consumer health and safety associated with the manufacturing and use of chemicals. Our manufacturing processes may utilise and result in the emission of or exposure to substances with potential health risks. We also manufacture products which may pose health risks. Although we apply a duty of care principle and implement measures to eliminate or mitigate associated potential risks, including the Chemical and Allied Industries' Association Responsible Care® programme, we may be subject to liabilities as a result of the use or exposure to these materials or emissions.

        Consequently, markets may apply pressure on us concerning certain of our products, manufacturing processes, transport and distribution arrangements. As a result of these additional pressures, the associated costs of compliance and other factors, we may be required to withdraw certain products from the market, which could have a material adverse effect on our business, operating results, cash flows and financial condition.

Regulation of greenhouse gas emissions could increase our operational cost and reduce demand for our products

        Climate change poses a significant risk for our business, both in meeting anticipated legislative requirements and in adapting to its potential physical impacts. Identifying the appropriate responses that balance the needs for economic development, job creation, energy security and emissions reductions represent a profound challenge for Sasol's South African operations in particular.

        Sasol's highly energy intensive-operations exist largely in South Africa in the midst of rapidly evolving national legislation on greenhouse gas emissions. In the National Climate Change Policy (NCCP), South Africa reiterated its intent to, subject to certain conditions, implement nationally appropriate mitigation actions to enable a 34% deviation below "business as usual" emissions growth trajectory by 2020, and 42% by 2025. The NCCP indicates the implementation of a carbon budget process which is now being cascaded to company level, and potentially suggests significant changes to the South African regulatory landscape as of 2021. The first phase of five years for the carbon budget process is a pilot phase where no sanctions will apply. Uncertainty remains as to the next phase, the details of which will be developed during the first phase on how this target as well as the carbon budget and its link to the potential carbon tax will influence Sasol's business. A high risk also remains that National Treasury in South Africa will still pursue a stand-alone carbon tax. The potential double compliance burden may pose additional financial implications for Sasol's business.

        A reduction of greenhouse gas emissions could be achieved through market-based regulatory programmes, technology or performance-based standards or a combination of them. Current measures in South Africa have already resulted in increased compliance costs for power suppliers that are passed on to consumers in the form of levies for electricity generated from fossil fuels. These types of levies have increased substantially over time and are likely to increase further due to the electricity supply constraint experienced in South Africa in particular.

        Our international operations are less carbon intensive and have been operating in a more mature greenhouse gas regulatory regime for a period of time already. However, continued political attention to issues concerning climate change, and potential mitigation through regulation, could have a material impact on our operations and financial results. Key international negotiations are likely to be concluded by the end of calendar year 2015, where governments plan to adopt a new protocol applicable to both

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developed and developing countries, with the potential impact of stricter standards that would apply to our operations.

        The development of these and other greenhouse gas emissions-related laws, global treaties, policies and regulations may result in substantial capital, compliance, operating and maintenance costs. The level of expenditure required to comply with any laws and regulations is uncertain and will depend on a number of factors including, among others, the sectors covered, the greenhouse gas emissions reductions required by law, the extent to which we would be entitled to receive any emission allowance allocations or would need to purchase compliance instruments on the open market or through auctions, the price and availability of emission allowances and credits, and the impact of legislation or other regulation on our ability to recover the costs incurred through the pricing of our products. Material price increases or incentives to conserve or use alternative energy sources could reduce demand for products we currently sell and adversely affect our sales volumes, revenues and margins.

We are subject to competition and antitrust laws

        Violations of competition/antitrust legislation could expose the group to administrative penalties and civil claims and damages, including punitive damages, by entities which can prove they were harmed by such conduct. Such penalties and damages could be significant and have an adverse impact on our business, operating results, cash flows and financial condition. In addition, there is also the significant reputational damage that accompanies findings of such contraventions as well as imprisonment or fines for individuals in some countries where antitrust violations are a criminal offence. Competition authorities are increasingly engaging with each other to exchange information relating to potential violation of antitrust laws and enforce antitrust laws. The South African Competition Commission is conducting investigations into the petroleum and polymer industries.

        The group has cooperated with competition authorities to deal pro-actively with non-compliance matters. We continue to interact and cooperate with the South African Competition Commission in respect of leniency applications as well as in the areas that are subject to the South African Competition Commission investigations. Refer to "Item 4.B Business overview—Legal proceedings and other contingencies".

        Although it is our policy to comply with all laws, and notwithstanding training and compliance programmes, we could inadvertently contravene competition or antitrust laws and be subject to the imposition of fines, criminal sanctions and/or civil claims and damages. This could have a material adverse impact on our reputation, business, operating results, cash flows and financial condition.

        The competition law compliance risks mentioned above escalated for companies as the provisions contained in the Competition Law Amendment Act of 2009 relating to market enquiries became effective, as from 1 April 2013. The market enquiry provisions grant the Competition Commission the authority to conduct inquiries into the general state of competition in any market in South Africa for particular goods or services without referring to specific prohibited conduct or a particular firm. In this regard, the Competition Commission commenced a market inquiry into the South African liquefied petroleum gas (LPG) market in June 2014. The remaining sections of the Competition Law Amendment Act of 2009 have not as yet come into effect. Should the remainder of the sections relating to individual criminal liability for collusion as well as the concept of a "complex monopoly", which will allow the Competition Commission to start an investigation against larger industry players without a formal complaint, become effective, the competition law compliance risks mentioned above will be further aggravated. This could have a material adverse impact on our business, operating results, cash flows and financial condition.

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We may not be successful in attracting and retaining sufficiently skilled employees

        We are highly dependent on the continuous development and successful application of new technologies. In order to achieve this, we need to maintain a focus on recruiting and retaining qualified scientists, engineers, project execution skills, artisans and operators. In addition, we are dependent on highly skilled employees in business and functional roles to establish new business ventures as well as to maintain existing operations.

        The quality and availability of skills in certain labour markets is impacted by the challenges within the education and training systems in certain countries in which we operate. Localisation, diversity and other similar legislation in countries in which we operate are also key considerations in the attraction and retention of sufficiently skilled employees. In an increasingly competitive market for limited skills, failure to attract and retain people with the right capabilities and experience could negatively affect our ability to operate existing facilities, to introduce and maintain the appropriate technological improvements to our business, as well as our ability to successfully construct and commission new plants or establish new business.

Intellectual property risks may adversely affect our freedom to operate our processes and sell our products and may dilute our competitive advantage

        Our various products and processes, including most notably, our chemical, CTL and GTL products and processes have unique characteristics and chemical structures and, as a result, are subject to confidentiality and/or patent protection, the extent of which varies from country to country. Rapid changes in our technology commercialisation strategy may result in a misalignment between our intellectual property protection filing strategy and the countries in which we operate. The disclosure of our confidential information and/or the expiry of a patent may result in increased competition in the market for our products and processes, although the continuous supplementation of our patent portfolio mitigates such risk to an extent. In addition, aggressive patenting by our competitors, particularly in countries like the US, may result in an increased patent infringement risk and may constrain our ability to operate in our preferred markets.

        A significant percentage of our products can be regarded as commodity chemicals, some of which have unique characteristics and chemical structure which make the products suitable for different applications than the typical commodity products. These products are normally utilised by our customers as feedstock to manufacture specialty chemicals or application-type products. We have noticed a worldwide trend of increased filing of patents relating to the composition of product formulations and the applications thereof. These patents may create pressure on those of our customers who market these product formulations which may adversely affect our sales to these customers. These patents may also increase our risk to exposure from limited indemnities provided to our customers of these products in case there is a patent infringement which may impact the use of the product on our customers' side. Patent-related pressures may adversely affect our business, operating results, cash flows and financial condition.

        We believe that our proprietary technology, know-how, confidential information and trade secrets provide us with a competitive advantage. A possible loss of experienced personnel to competitors, and a possible transfer of know-how and trade secrets associated therewith, may negatively impact this advantage. In addition, the patenting by our competitors of technology built on our know-how obtained through former employees may result in additional risk.

        Similarly, operating and licensing technology in countries in which intellectual property laws are not well established and enforced may result in an inability to effectively enforce our intellectual property rights. The risk of some transfer of our know-how and trade secrets to our competitors is increased by the increase in the number of licences granted under our intellectual property, as well as the increase in the number of licensed plants which are brought into operation through entities which

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we do not control. As intellectual property warranties and indemnities are provided under each new licence granted, the cumulative risk increases accordingly.

        The above risks may adversely affect our business, operating results, cash flows and financial condition.

Increasing competition in relation to products originating from countries with low production costs may adversely affect our business, operating results, cash flows and financial condition

        Certain of our chemical production facilities are located in developed countries, including the United States and Europe. Economic and political conditions in these countries result in relatively high labour costs and, in some regions, relatively inflexible labour markets. Increasing competition from regions with lower production costs and more flexible labour markets, for example the Middle East, India and China, exerts pressure on the competitiveness of our chemical products and, therefore, on our profit margins. This could result in the withdrawal of particular products or the closure of specific facilities, which may have a material adverse effect on our business, operating results, cash flows and financial condition.

We may face potential costs in connection with industry-related accidents or deliberate acts of terror causing property damage, personal injuries or environmental contamination

        We operate coal mines, explore for and produce oil and gas and operate a number of plants and facilities for the manufacture, storage, processing and transportation of oil, chemicals and gas, related raw materials, products and wastes. These facilities and their respective operations are subject to various risks, such as fires, explosions, releases and loss of containment of hazardous substances, soil and water contamination, flooding and land subsidence, among others. As a result, we are subject to the risk of experiencing, and have in the past experienced, industry-related incidents. Our facilities are also subject to the risk of deliberate acts of terror.

        Our main Secunda Synfuels production facilities are concentrated in a relatively small area in Secunda, South Africa. The size of the facility is approximately 82,5 square kilometres (km²) with operating plants accounting for 8,35 km². This facility utilises feedstock from our mining and gas businesses, while the chemical and oil businesses rely on the facility for the raw materials it produces. Accidents and acts of terror may result in damage to our facilities and may require shutdown of the affected facilities, thereby disrupting production and increasing production costs and may in turn, also even disrupt the mining, gas, chemicals and oil businesses which make up a significant portion of our total income. Furthermore, accidents or acts of terror at our operations may have caused, or may in future cause, environmental contamination, personal injuries, health impairment or fatalities and may result in exposure to extensive environmental remediation costs, civil litigation, the imposition of fines and penalties and the need to obtain or implement costly pollution control technology.

        Our products are ultimately sold to customers around the world and this exposes us to risks related to the transportation of such products by road, rail or marine vessels. Such activities take place in the public domain exposing us to incident risks over which we have limited control.

        It is Sasol's policy to procure appropriate property damage and business interruption insurance cover for its production facilities above acceptable deductible levels at acceptable commercial premiums. However, full cover for all loss scenarios may not be available at acceptable commercial rates, and we cannot give any assurance that the insurance procured for any particular year would cover all potential risks sufficiently or that the insurers will have the financial ability to pay all claims that may arise.

        The costs we may incur as a result of the above or related factors could have a material adverse effect on our business, operating results, cash flows and financial condition.

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We may face the risk of information security breaches or attempts to disrupt critical information technology services, which may adversely impact our operations

        The increasing use of information technology (IT) systems in operations is making all industries, including the energy and chemicals industries, much more susceptible to cyber threats. Recent global trends have shown that the energy sector is increasingly becoming the target of cyber-attacks. Although we have an information security programme in place, Sasol may be vulnerable to cyber-attacks and attempts to gain unauthorised access to our IT systems. Disruption of critical IT services, or breaches of information security, could have a material adverse effect on our disclosure control processes.

Our coal, synthetic oil, natural oil and natural gas reserve estimates may be materially different from quantities that we eventually recover

        Our reported coal, synthetic oil, natural oil and gas reserves are estimated quantities based on applicable reporting regulations that under present and anticipated conditions have the potential to be economically mined, processed or produced.

        There are numerous uncertainties inherent in estimating quantities of reserves and in projecting future rates of production, including factors which are beyond our control. The accuracy of any reserve estimate is a function of the quality of available data, engineering and geological interpretation and judgement.

        Reserve estimates will require revision based on actual production experience and other factors, including extensions and discoveries. In addition, regulatory changes, market prices, increased production costs and other factors may result in a revision to estimated reserves. Significantly revised estimates may have a material adverse effect on our business, operating results, cash flows and financial condition. See "Item 4.D—Property, plants and equipment".

Our international activities increase the compliance risks associated with economic and trade sanctions imposed by the United States, the European Union and other jurisdictions

        Our international operations could expose us to trade and economic sanctions or other restrictions imposed by the United States or other governments or organisations, including the United Nations, the European Union and its member countries. Under economic and trading sanctions laws, governments may seek to impose modifications to business practices, and modifications to compliance programmes, which may increase compliance costs, and may subject us to fines, penalties and other sanctions.

        Although we believe that we are in compliance with all applicable sanctions and embargo laws and regulations, and intend to maintain such compliance, there can be no assurance that we will be in compliance in the future, particularly as the scope of certain laws may be unclear and may be subject to changing interpretations.

        We are monitoring developments in the United States, the European Union and other jurisdictions that maintain sanctions programmes, including developments in implementation and enforcement of such sanctions programmes. Expansion of sanctions programmes, embargoes and other restrictions in the future (including additional designations of countries subject to sanctions), or modifications in how existing sanctions are interpreted or enforced, could have a material adverse effect on our business, operating results, cash flows and financial condition.

The exercise of voting rights by holders of American Depositary Receipts is limited in some circumstances

        Holders of American Depositary Receipts (ADRs) may exercise voting rights with respect to the ordinary shares underlying their American Depositary Shares (ADSs) only in accordance with the provisions of our deposit agreement (Deposit Agreement) with The Bank of New York Mellon, as the

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depositary (Depositary). For example, ADR holders will not receive notice of a meeting directly from us. Rather, we will provide notice of a shareholders meeting to The Bank of New York Mellon in accordance with the Deposit Agreement. The Bank of New York Mellon has undertaken in turn, as soon as practicable after receipt of our notice, to mail voting materials to holders of ADRs. These voting materials include information on the matters to be voted on as contained in our notice of the shareholders meeting and a statement that the holders of ADRs on a specified date will be entitled, subject to any applicable provision of the laws of South Africa and our Memorandum of Incorporation, to instruct The Bank of New York Mellon as to the exercise of the voting rights pertaining to the shares underlying their respective ADSs.

        Upon the written instruction of an ADR holder, The Bank of New York Mellon will endeavour, in so far as practicable, to vote or cause to be voted the shares underlying the ADSs in accordance with the instructions received. If instructions from an ADR holder are not received by The Bank of New York Mellon by the date specified in the voting materials, The Bank of New York Mellon will not request a proxy on behalf of such holder. The Bank of New York Mellon will not vote or attempt to exercise the right to vote other than in accordance with the instructions received from ADR holders.

        We cannot assure you that you will receive the voting materials in time to ensure that you can instruct The Bank of New York Mellon to vote the shares underlying your ADSs. In addition, The Bank of New York Mellon and its agents are not responsible for failing to carry out voting instructions or for the manner of carrying out voting instructions. This means that you may not be able to exercise your right to vote and there may be no recourse if your voting rights are not exercised as you directed.

Sales of a large amount of Sasol's ordinary shares and ADSs could adversely affect the prevailing market price of the securities

        Historically, trading volumes and liquidity of shares listed on the JSE Limited (JSE) have been low in comparison with other major markets. The ability of a holder to sell a substantial number of Sasol's ordinary shares on the JSE in a timely manner, especially in a large block trade, may be restricted by this limited liquidity. The sales of ordinary shares or ADSs, if substantial, or the perception that these sales may occur and be substantial, could exert downward pressure on the prevailing market prices for the Sasol ordinary shares or ADSs, causing their market prices to decline.

ITEM 4.    INFORMATION ON THE COMPANY

4.A    History and development of the company

        Sasol Limited, the ultimate holding company of our group, is a public company. It was incorporated under the laws of the Republic of South Africa in 1979 and has been listed on the JSE Limited (JSE) since October 1979. Our registered office and corporate headquarters are at 1 Sturdee Avenue, Rosebank, 2196, South Africa, and our telephone number is +27 11 441 3111. Our agent for service of process in the United States is Puglisi & Associates, 850 Library Avenue, Suite 204, P.O. Box 885, Newark, Delaware 19715.

        At 30 June 2015, we were one of the largest companies listed on the JSE by market capitalisation, with a market value of Sasol ordinary shares of R292 995 million. Our total consolidated turnover was R185 266 million for the year ended June 2015.

4.B    Business overview

        Sasol is an international integrated chemicals and energy company that leverages the talent and expertise of about 31 000 people working in 37 countries. We develop and commercialise technologies, and build and operate world-scale facilities, to produce a range of product streams, including liquid fuels, chemicals and low-carbon electricity.

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        While continuing to support our home-base of South Africa, Sasol is expanding internationally based on a unique value proposition. Our ability to deliver sustainable shareholder value is premised on developing our people, keeping them safe and healthy, contributing meaningfully to the social and economic development of the countries and communities within which we work, and doing so in an environmentally responsible way. Sasol is listed on the JSE (JSE: SOL) and the New York Stock Exchange (NYSE: SSL).

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Our strategy

        Sasol's strategic agenda is our blueprint over the near to medium term to achieve the Group's definition of victory, which is to grow shareholder value sustainably. To ensure that our strategic agenda remains robust and relevant, we review it regularly. Oil price volatility prompted us to revisit it in the year, and fine-tune our near-to-medium-term focus. We adjusted downwards our forecast for the average oil price over the next ten years and developed various scenarios to test and ensure the robustness of the capital portfolio. We are currently engaged in a similar review of our longer-term strategy to identify the shifts in emphasis and appropriate actions required to meet our long-term growth objectives.

        Our updated near-to-medium term strategic agenda

        Upstream—In Upstream, our drive to 'deliver low-cost feedstocks in Southern Africa' is a change from our previous focus on growing related upstream business. This shift places specific emphasis on ensuring continued access to vital natural resources and feedstocks to enable us to sustain and expand our integrated value chain in Southern Africa. Upstream will also focus on 'growing our Southern

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African upstream resources' to ensure that we direct our activities towards the region and that we consider a wider range of options to monetise resources for growth.

        Operations—In Operations, under our foundation pillar, two objectives have been combined, namely 'continuously improving our existing asset base' and 'maintaining our technological lead'. This is a clear affirmation that our existing operations hold substantial long-term value that require continuous investment to enhance the efficiency and reliability of our facilities, while minimising our environmental footprint and achieving world-class safety. In addition, we will safeguard our technical prowess by focusing on innovation to ensure our proprietary technologies remain robust and cutting edge. We will also focus on 'driving world-class safe operations to support growth'; an acknowledgment that to remain competitive over the long term, our operations must be outstanding in all respects: safe, reliable and efficient.

        Energy—The 'nurture and grow' focus in our Energy business is to 'optimise liquid fuels marketing channels' and, to grow sustainably, we intend to 'deliver selective gas-to-liquids (GTL) opportunities and grow low-carbon power generation'. While we remain optimistic about the longer-term prospects for GTL, in a low oil price environment, we need to narrow our focus on specific opportunities where the technology is robust, rather than accelerate GTL growth, as was the focus previously. Furthermore, in recent years, we have successfully delivered two gas-to-power plants, in Sasolburg in South Africa and Ressano Garcia in Mozambique.

        Chemicals—'Drive value chain optimisation' in our Chemicals business underscores the work required to ensure that our existing value chains deliver optimal performance through careful portfolio management. The second objective, namely 'drive selective growth based on feedstocks, market and/or technology advantage', under the sustainable growth pillar, is a refinement of a previous objective which focused on growing all value chains. This adjustment highlights that growth in our chemicals portfolio will be selective, and based on clear benefits in feedstocks, markets and technologies.

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Our project pipeline

        An important aspect of refining our strategic deliverables has been to scrutinise our pipeline of projects in relation to their human capital and financing requirements, material country risks and policy considerations. This has allowed us to prioritise our capital expenditure on the growth opportunities that play to our strengths globally, and which, we believe, will unlock sustainable maximum value for our shareholders.

Our group structure

        In 2012, we implemented our Business Performance Enhancement Programme, over a four-year-period to review the effectiveness of our operating model and evaluate how the business could improve its performance by sustainably optimising costs and reducing complexity.

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        One of the cornerstones of Sasol's past successes stemmed from our diverse businesses and activities being organised along an integrated value chain. While our value chain remains integrated, over the past decade we established and drove independent businesses within Sasol founded on a product-based operating model. Over time, organising our businesses in this manner resulted in increased complexity, leading to slower decision-making, higher costs and greater time required for internal alignment and co-ordination. To bring greater focus and increased simplicity to how Sasol is structured and managed, we have streamlined our corporate structures and reorganised our businesses from a product-based operating model to one based on our value chain.

        Our new operating model, and a simplified and consolidated legal structure, came into effect on 1 July 2014. The new operating model aligns the components of Sasol—operating business units, regional operating hubs, strategic business units, and group functions—according to a single value chain, focused on the production of liquid fuels, high-value chemicals and low-carbon electricity, as outlined below:

•

The Operating Business Units comprise our mining and upstream oil and gas activities, focusing mainly on securing feedstock supply;



•

The Regional Operating Hubs include our operations in Southern Africa, United States and Eurasia, focusing on sustaining asset management and performance while delivering to plan and optimising the total cost of production;



•

The Strategic Business Units focus on our commercial and enhanced customer interfaces within the energy and chemicals arenas, and on optimising business performance through marketing and sales excellence; and



•

Our Group Functions deliver fit-for-purpose business support services and solutions.

        This operating platform also enables Sasol to operate as a streamlined and united company, allowing all employees to drive in the same direction towards our definition of victory—to grow shareholder value sustainably, which in turn benefits all Sasol stakeholders.

        We divide our operations into the following reportable segments:

Operating Business Units

•

Mining.  Mining is responsible for securing coal feedstock for the Southern African value chain, mainly for gasification, but also to generate electricity and steam. We mine approximately 40,0 million tons (Mt) of saleable coal per year, mostly for our complexes in Secunda and Sasolburg, in South Africa, and export approximately 3,4 Mt of coal annually. Mining accounted for 1% of our total external segmental turnover in 2015.



•

Exploration and Production International (E&PI) develops and manages the group's upstream interests in oil and gas exploration and production in Mozambique, Canada Gabon, South Africa and Australia. We produce natural gas and condensate from Mozambique's Pande and Temane fields, shale gas and condensate from our share in the Farrell Creek and Cypress A assets in Canada, and oil in Gabon through our share in the offshore Etame Marin Permit (EMP). Our current development and production assets and our exploration portfolio are shown on maps on pages M-6 to M-9. E&PI accounted for 1% of our total external segmental turnover in 2015.

Strategic Business Units

•

Energy is responsible for the sales and marketing of liquid fuels, natural gas and electricity. We also develop, implement and manage international GTL businesses based on our proprietary technology. In Southern Africa, we market approximately nine billion litres of liquid fuels annually, blended from fuel components produced by Secunda Synfuels Operations, crude oil

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refined at the Natref refinery as well as products that we purchase from other refiners. We market approximately 58 billion standard cubic feet (bscf) of natural and methane-rich gas a year. We have concluded short-term power purchase agreements in South Africa with Eskom for up to 440 megawatts. In Mozambique, our joint operation sells electricity into the national grid. We hold 49% in ORYX GTL in Qatar, and a 10% economic interest in Escravos GTL in Nigeria. We are evaluating GTL projects in the United States and Uzbekistan. Energy accounted for 41% of our total external segmental turnover in 2015.

•

Base Chemicals markets commodity chemicals based on the group's upstream Fischer-Tropsch, ethylene, propylene and ammonia value chains. Our key product lines are polymers, solvents and ammonia-based explosives and fertilisers. We source our final products from Secunda Chemicals Operations and Sasolburg Operations. Base Chemicals accounted for 20% of our total external segmental turnover in 2015.



•

Performance Chemicals markets commodity and differentiated performance chemicals. Our key product lines are organics, inorganics and wax value chains. In South Africa, we source our organics and wax final products from Secunda Chemicals Operations and Sasolburg Operations. In Europe and the United States, we source our organics, wax and other final performance chemical products from the Eurasian and US Regional Operating Hubs. Performance Chemicals accounted for 37% of our total segmental turnover in 2015.

Other

•

Our Group Functions focus on delivering fit-for-purpose, supportive and enabling business services and solutions. We are involved in technology research and development activities, both in South Africa and internationally. Our treasury and financing activities also form part of Group Functions.

        The new operating model structure reflects how the results are reported to the Chief Operating Decision Maker (CODM). The CODM for Sasol is the President and Chief Executive Officer.

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        The following tables present our total external turnover after the elimination of inter-segment turnover by business operation and geographic market in accordance with IFRS:

 

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Operating Business Units

Mining

Nature of the operations and principal activities

        In South Africa, we have three coal mining operations:

•

The coal-to-liquids (CTL) complex situated in Secunda, consists of the Bosjesspruit, Brandspruit, Middelbult and Syferfontein mines. These mines supplied 39,7 million tons (Mt) of coal to Secunda Synfuels Operations and 0,2 Mt to Mooikraal Colliery during the year. Of this amount, 31,8 Mt of coal was produced, 5,1 Mt was purchased from a third party and 0,4 Mt was extracted as part of the development of new collieries. 2,0 Mt was a mixture of run of mine (ROM) and by-product coal transferred from our export complex. At 30 June 2015, the stockpile reduced by 0,6 Mt on the opening stock.



•

The Sigma complex, situated near Sasolburg in the Free State province, consisting of the Mooikraal colliery, supplied 2,0 Mt of coal to Sasolburg Operations during the year. Of this amount 1,9 Mt was sourced from the Mooikraal Colliery, 0,1 Mt fine coal was purchased from the Secunda Synfuels Operations and 0,2 Mt was supplied by our Secunda Collieries. At 30 June 2015, the stockpile increased by 0,2 Mt on the opening stock.



•

The export complex, consisting of the Twistdraai Colliery, where coal is beneficiated and exported primarily to Europe, the Middle East and India produced 7,5 Mt during the year. In 2015, 2,0 Mt of ROM and middlings by-product was transferred to the CTL complex, 3,4 Mt exported and 2,2 Mt was discarded during the beneficiation process. The stockpile reduced by 0,1 Mt.

        During 2015, Mining produced 41,2 Mt of coal, compared to 41,5 Mt in the previous year, mainly due to scaling down of older mines and slower ramping up of new mines.

        Normalised mining unit costs of production decreased by 2% compared to the prior year through various efficiency initiatives and sustained improvement in underground infrastructure.

Operational statistics

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Principal markets

        We extract and supply coal mainly to our Secunda Synfuels Operations and Sasolburg Operations under terms and conditions which are determined on an arm's length basis. We export approximately 8% of our production.

        We continue to explore marketing opportunities for coal in both the international and domestic utility market.

        We are committed to support and sustain the Group's liquid fuels, chemicals and power generation operations to at least 2050 by providing a reliable and uninterrupted supply of coal to Group facilities in Secunda and Sasolburg. We have already secured an extension of our Secunda mining right to 2040. Mining rights are generally issued for a period of up to 30 years at a time. The validity period of our mining rights may, on application, be renewed for further periods not exceeding 30 years each.

        We continued to investigate alternative coal sources, including the viability of supply from Limpopo West, where we have applied for mining rights. However, as part of Group's Response Plan to lower oil prices, we delayed the pre-feasibility study on mining reserves in this coal-rich area until the end of the 2017 calendar year. This postponement will not jeopardise long-term coal supply to Sasol. From a technological perspective, we evaluated options to better exploit our existing reserves through higher extraction methods and alternative mining techniques without an additional impact on the environment. The viability of supply from Limpopo West is subject to securing infrastructure between Limpopo and Mpumalanga.

Seasonality

        The demand for coal by our Secunda Synfuels Operations and Sasolburg Operations is consistent throughout the year. Export coal demand is consistent, mainly in Europe, the Middle East and India. Our sales are planned to ensure even shipment of coal throughout the year.

Marketing channels

        We make use of a direct sales model to market our products to third parties.

Factors on which the business is dependent

        Being part of the integrated Sasol value chain, Mining is required to be engaged on an on-going basis with Secunda Synfuels Operations, to ensure optimal delivery and utilisation of our coal resources. We also have dedicated strategic and long-term planning departments to ensure that mining and other related activities are performed in accordance with our plans for the future. Also refer to Item 4B "Business overview—Regulation of mining activities in South Africa".

Property, plants and equipment

        Mines Mining operates six mines for the supply of coal to the Secunda Synfuels Operations, Sasolburg Operations (utility coal only) and the external market. The annual production of each mine,

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the primary market to which it supplies coal and the location of each mine are indicated in the table below:

        The development of the Impumelelo and Shondoni collieries, which are part of the R14,0 billion mine replacement programme, continue to progress steadily. The establishment of these collieries will ensure uninterrupted coal supply to Secunda Synfuels Operations. Project delays were experienced at the Impumelelo and Shondoni collieries due to a slower than expected shaft sinking process and a four month labour dispute experienced by a mining contractor. Beneficial Operation (BO) is expected in the second half of the 2015 and first half of the 2016 calendar years, respectively. Both projects are expected to be delivered within budget.

        The new Tweedraai adit will also provide further access to reserves adjacent to our current Syferfontein operations and is expected to be completed in the first half of the 2016 financial year. In 2015, the Twistdraai Thubelisha shaft conveyor produced from five sections and is expected to reach full production capacity by 2019.

Coal handling facility—Sasol Coal Supply (SCS)

        SCS at Secunda is responsible for conveying coal from the mine mouth to a stock holding facility. Coal from the various collieries is blended in order to homogenise the product, which is then conveyed to Secunda Synfuels Operations, as required.

Beneficiation plant

        We operate a coal beneficiation plant in Secunda to enable us to supply export quality coal to international markets. The design throughput of the plant is 10,5 Mt per annum. The plant feedstock is supplied by Twistdraai colliery via overland conveyor belts of approximately 20 km in length. The new Twistdraai Thubelisha shaft conveyor, which is approximately 17 km in length, will replace the current conveyor system over the next few years.

Exploration and Production International (E&PI)

Nature of the operations and principal activities

        E&PI's principal activities are the exploration, appraisal, development and production of hydrocarbon resources. We currently hold equity in three assets with proved natural oil and gas reserves in Mozambique, Gabon and Canada, all of which are producing. We also have equity in non-producing assets and exploration licences in Mozambique, Nigeria, Australia and South Africa.

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        In Mozambique, we operate the onshore Pande-Temane Petroleum Production Agreement (PPA) licence, producing natural gas and condensate from the Temane and Pande gas fields. Gas production from the Temane and Pande fields commenced in 2004 and 2009, respectively. We also operate the Pande-Temane Production Sharing Agreement (PSA) licence, in which limited pre-development activities have been initiated, following submission of the initial field development plan in February 2015. Government approval of the field development plan is still pending.

        In British Columbia, Canada we have a 50% interest in the unconventional (shale/tight gas) Montney assets operated by Progress Energy Canada Limited. The assets have produced gas and small volumes of petroleum liquids since before we acquired our interest in 2011. Appraisal and development of the Farrell Creek and Cypress A fields are ongoing.

        In Gabon, we have a 27,75% interest in the offshore Etame Marin Permit asset, operated by VAALCO Gabon (Etame) Inc. Oil production from the Etame field commenced in 2002, followed by production from the associated Avouma and Ebouri fields in 2007 and 2009, respectively.

Principal markets and marketing channels

        Gas from our Mozambique Pande-Temane PPA asset is produced in accordance with long-term gas sales agreements. The bulk of the production is exported to South Africa for use as feedstock for our chemical and synthetic fuel operations. The remainder is sold into the Mozambican market for in-country use. Condensate is sold for export via the port of Beira or the port of Maputo at spot prices.

        Gas produced from our Canada unconventional (shale/tight gas) Montney assets is sold by the Progress/Sasol Montney Partnership into Western Canada, under a long-term marketing agreement with Progress Energy Canada Limited.

        Oil produced from the Etame Marin Permit asset is marketed internationally on the open market. Oil is typically sold under short-term crude oil sale and purchase agreements which are renewed annually.

        The geographical distribution of revenues for each of the last three financial years is presented above. Refer "Our group structure".

Factors on which the business is dependent

        In Mozambique, the majority of the gas produced from our Pande-Temane PPA asset is supplied under two long-term gas sales agreements with our Energy business. These contracts, signed in 2002 and 2008, respectively, run until 2029 and can be extended for a further five years. The gas forms part of the feedstock for our South African chemical and synthetic fuel operations in Secunda and Sasolburg. In addition, there are three 20-year gas sales agreements, which run until 2034, to supply gas to the Mozambique market. The contracts are with Matola Gas Company S.A., the Empresa Nacional de Hidrocarbonetos (ENH), Kogas S.A. joint venture and Central Térmica de Ressano Garcia S.A. (CTRG). Further, on 1 June 2015, a sales agreement was executed with ENH for the delivery of 2PJ/a of gas (approximately 6 mmscf/day). These contracts satisfy a licence condition that a portion of gas produced is utilised in-country.

Property, plants and equipment

        We operate production facilities in Mozambique and have non-operating interests in producing assets in Canada and Gabon.

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Production capacity at 30 June 2015

Strategic Business Units

Energy

Nature of operations and principal activities

        Energy markets and sells liquid fuels, pipeline gas and electricity. Internationally, Energy develops implements and manages Sasol's gas-to-liquids (GTL) business ventures based on our proprietary technology.

Sales

        We market approximately nine billion litres of liquid fuels annually, blended from fuel components produced by Secunda Synfuels Operations, crude oil refined at Natref, as well as some products that we purchase from other refiners. We procure crude oil that is refined through our interest in the Natref refinery. Coal is purchased from Mining and natural gas from E&PI for processing through Secunda Synfuels Operations. We market approximately 58 bscf of natural and methane-rich gas a year. We have concluded short-term power purchase agreements in South Africa with Eskom for the supply of up to 440 megawatts. In Mozambique, our joint operation sells electricity into the national grid. We hold 49% in ORYX GTL in Qatar, and a 10% economic interest in Escravos GTL in Nigeria.

        Natural gas sold to external customers in South Africa and internally to Sasol's operations is priced according to the National Energy Regulator of South Africa (NERSA) approved methodology whereby a maximum molecule price is determined. Based on volumes purchased, customers qualify for six different categories of gas pricing. Annual escalation of the maximum gas price is determined with reference to an index which incorporates electricity prices (37%), coal export prices in rand (37%), oil prices in rand (24%) and other factors (2%).

        GTL products are sold at international quoted diesel and naphtha prices.

GTL developments

        In light of the lower oil price environment, we have chosen to deliver selective GTL opportunities based on our Sasol Slurry Phase Distillate™ technology. In the year, this included a reassessment of the feasibility of major GTL projects and evaluation of opportunities to license our proprietary technology, as a way of expanding this portfolio. As a result, we delayed the final investment decision on the proposed GTL plant in the United States and continue to evaluate licensing options for the proposed GTL plant in Uzbekistan. To support the Uzbekistan GTL project we are progressing, together with

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BASF, an FT catalyst expansion project (FEED) at the facility situated in De Meern in the Netherlands, which will be operated and owned by BASF.

        In Nigeria, the Escravos GTL (EGTL) plant achieved beneficial operation in the year, with the first train coming on line in June 2014, followed by the second train in November 2014. The first diesel cargo was exported in November 2014 followed by the first naphtha cargo in January 2015. The EGTL plant continues to ramp up, drawing on lessons learned from ORYX GTL's start-up.

Principal markets

        In Southern Africa, we are responsible for marketing of liquid fuels (i.e. fuel oils, jet fuels, diesel, petrol and liquid petroleum gas (LPG)) to wholesalers and overland export customers. We do direct business-to-business marketing of liquid fuels and lubricants and operate a network of retail convenience Sasol service stations in South Africa. We also supply gas to gas traders, industrial and commercial customers. We have power purchase agreements (PPA) in place with state-owned electricity companies in Mozambique and South Africa.

        In Qatar, the bulk of the ultra-low-sulphur GTL diesel produced at ORYX GTL is sold as blend stock for middle distillate product streams derived from conventional oil refining to produce on-specification automotive diesel. It is primarily sold to European customers. GTL naphtha is sold to naphtha crackers that produce olefins such as ethylene.

Seasonality

        The South African demand for road transportation fuels is fairly consistent throughout the year. Slightly higher demand for petrol is evident during the December summer holiday period. Diesel demand tends to peak during October due to the summer grain planting season.

        Demand for gas in South Africa is consistent throughout the year, and is generally not subject to seasonal fluctuations due to moderate temperature variances between seasons and the absence of a significant residential market.

        GTL product prices are impacted by the seasonal behaviour of global petroleum product markets.

Raw materials

        The main feedstock components used in the Southern Africa production processes are low-grade coal obtained from Mining, natural gas, crude oil and lubricant base oils.

        Natural gas is purchased in Mozambique, from an unincorporated joint venture (UJV) consisting of Sasol Petroleum Temane Limitada (SPT), International Finance Corporation (IFC) and Companhia Moçambicana de Hidrocarbonetos, S.A.R.L (CMH). The gas is transported by Republic of Mozambique Pipeline Company (Rompco) to Secunda in South Africa. Methane-rich gas is purchased from Secunda Synfuels Operations.

        Natref obtains approximately 50% of its crude oil requirements from the Middle East through crude oil term contracts. The balance is purchased on the spot market from West Africa and other sources.

        Lubricant base oils are obtained from the blending facility at Island View in Durban. The plant is managed by Engen Petroleum and blends automotive and industrial lubricants to Energy's specifications. Base oils are predominantly procured locally.

        ORYX GTL purchases natural gas feedstock from Al Khaleej Gas, a joint venture between ExxonMobil Middle East Gas Marketing Limited and Qatar Petroleum, under a gas purchase

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agreement with a contracted minimum off-take volume. The agreement commenced in January 2006 and is valid for a term of 25 years with an option to extend for a further seven years.

        Escravos GTL (EGTL) Venture purchases 100% of its gas requirements for the EGTL plant from Chevron Nigeria Limited (CNL) and Nigerian National Petroleum Corporation (NNPC), the upstream joint venture partners. The agreement commenced in November 2005 and is valid for a term of 25 years. The term of the agreement may be extended by the parties on terms and conditions that are mutually agreed.

Marketing channels

        Energy's marketing channels can be divided into the following main areas: sales to licensed wholesalers; direct marketing (retail and commercial markets) and gas marketing in South Africa (wholesale and commercial markets); direct marketing in other African countries; overland exports into the rest of Africa; and GTL products internationally.

•

Licensed wholesalers

Licensed wholesalers include multinational oil companies with their own South African refining capacity such as BP, Engen Petroleum, Royal Dutch Shell, Chevron, Total South Africa (Total), PetroSA and non-refinery wholesalers without South African refinery capacity.

The bulk of Sasol's fuel sales in South Africa are to licensed wholesalers who either do not have their own refinery production or market more fuel than what they can produce. These customers either buy from Sasol or import the balance of their fuel supply requirements.

Individual agreements that vary in terms of duration, volume, and modes of delivery regulate the relationship between Sasol and our licensed wholesale customers. Sasol matches its production slate to the agreed product slate to ensure efficiency and reliable supply. We import product to cover planned and unplanned refinery outages to ensure that we meet our supply commitments.

We also sell base bitumen to wholesalers and construction companies.

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Direct markets (retail, commercial, lubricants, aviation fuel, fuel oil and bitumen)

We currently operate a network of retail convenience centres, which consists of 382 Sasol branded retail sites. In 2013, we signed an exclusive agreement with Burger King to open fast food outlets at our retail convenience centres. This creates an opportunity for us to expand our retail footprint and increase the average throughput at Sasol service stations.

We have also partnered with ABSA Bank in South Africa to offer a loyalty rewards programme to customers at the retail convenience centres. This has added value to the network.

We recently introduced our innovative low-sulphur 10ppm diesel at a limited number of retail sites in Gauteng and Mpumalanga with good results. We are in the process of rolling the product out to the rest of our network in Gauteng.

We sell liquid fuels (i.e. fuel oil, diesel, petrol and liquified petroleum gas (LPG)) to a variety of end users through the commercial marketing channel. Our customer base includes companies in the transportation, mining, food and electricity-generation industries.

We sell lubricants in industrial markets and to motorists via our retail network.

Our jet fuel marketing is focused on South Africa's premier airport, OR Tambo International Airport, with Sasol's market share estimated at 20%.

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•

Gas marketing (wholesale and commercial markets. Wholesale consists of Sasol internal customers and resellers)

We supply gas to industrial and commercial customers in Mpumalanga, Gauteng, KwaZulu-Natal, North-West and Free State. Besides marketing pipeline gas to these customers, natural gas is also supplied as feedstock to Sasol's facilities in Sasolburg and Secunda.

Approximately 94% of gas to end-use industrial customers is sold through our own sales and marketing personnel. We also supply a small number of traders and reticulators who sell gas to their own customers.

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Rest of Africa marketing

We hold a 49% interest in Petromoc e Sasol Sarl (PeSS), which is a joint venture with the Mozambican National State Oil Company, Petromoc. PeSS markets its product through eight company-owned and eight dealer-owned retail convenience centres. PeSS has approximately 38 commercial customers and has an 8% share of the petrol and diesel market in Mozambique. PeSS also markets illuminating paraffin and lubricants.

On 1 November 2014, we disposed of Exel Lesotho, a wholly-owned subsidiary of Sasol involved in retail and commercial marketing of transportation fuels in Lesotho. The sale of Exel Swaziland, a wholly owned subsidiary of Sasol, involved in retail and commercial marketing of transportation fuels in Swaziland is pending approval from the Central Bank of Swaziland.

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Exports (overland to the rest of Africa)

We are ideally situated to supply overland volumes into the rest of Africa. However, the volume available for export is limited by demand in South Africa.

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GTL marketing

ORYX GTL markets the GTL diesel it produces and the GTL naphtha and LPG are sold by Qatar International Petroleum Marketing Company Limited (Tasweeq).

Sasol Chevron Holdings Limited (SCHL) markets the GTL diesel and naphtha produced from the EGTL facility in Nigeria.

Factors on which the business is dependent

Licences and regulations

        Activities across the integrated value chain, including manufacturing, storing, wholesaling and retailing, are regulated through a licensing regime and may only be conducted once a licence has been issued by the Petroleum Controller under the Petroleum Products Act, 1977.

        Retail pump prices of petrol, the maximum refining gate price and maximum cylinder retail price of LPG, and a maximum single national retail price of unpacked illuminating kerosene are also regulated by the Petroleum Controller.

        Onerous application requirements and a lengthy licensing process may hamper the development of retail convenience centres in future.

        NERSA, under the Petroleum Pipelines Act, sets tariffs for petroleum pipelines and approves tariffs for third party access to storage and marine loading facilities. We have obtained the necessary licences required from NERSA, in terms of the Gas Act, to operate our gas transmission and distribution facilities, as well as to engage in our trading activities.

        As and when expansion of our transmission and distribution facilities is required, we apply for the required construction licences from NERSA.

        Refer to Item 4B "Business overview—Regulation of petroleum-related and pipeline gas activities in South Africa" for additional information.

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Feedstock

        The growth of the Energy business depends on the availability of competitively priced natural gas or coal reserves.

Technology

        The Sasol Slurry Phase Distillate^TM (SPD^TM) process—Based on our Technology functions long and extensive experience in the commercial application of the Fischer-Tropsch (FT) technology, we have successfully developed the FT-based Sasol SPD^TM process for converting natural gas into high-quality, environment-friendly GTL diesel, GTL kerosene and other liquid hydrocarbons.

        The SPD^TM process consists of three main steps, each of which is commercially proven. These include:

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the Haldor Topsøe reforming technology, which converts natural gas and oxygen into syngas;



•

our Slurry Phase FT technology, which converts syngas into hydrocarbons; and



•

the Chevron Isocracking^TM technology, which converts hydrocarbons into particular products, mainly diesel, naphtha and LPG.

        Currently we believe, based on our knowledge of the industry and publicly available information, that on a worldwide basis we have the most extensive experience in the application of FT technology on a commercial scale. Given the increasing discovery of extensive natural gas reserves, our Sasol SPD^TM process can be applied with significant commercial advantages in various parts of the world. As a consequence, our technology has evoked interest from countries and companies with extensive natural gas reserves as an appealing alternative for commercialising these reserves. The Sasol SPD^TM process converts natural gas into diesel and other liquid hydrocarbons, which are generally more environmentally friendly and of higher quality and performance compared to the equivalent crude oil-derived products. In view of product specifications gradually becoming more stringent, especially with respect to emissions, we believe that the option of environmentally friendly GTL fuels will become increasingly appealing. GTL diesel can be used with optimised engines for best performance, although it can also be utilised with current compression ignition engines. GTL diesel is currently used as a cost-competitive blend stock for conventional diesels, thereby enabling conventional diesel producers to improve the quality and capacity of their product without investing substantially in sophisticated new plants and infrastructure. We anticipate that the combined factors of GTL diesel's superior characteristics and the prevailing market conditions in developed economies will enable GTL diesel to command premium prices for either niche applications or as a blend stock for upgrading lower-specification products. The construction of GTL facilities and the production of GTL fuels require significant capital investment.

Remaining cost competitive

        Working closely with our Technology function's Fischer-Tropsch process innovation teams, we are involved in on-going programmes aimed at further improving competitiveness by lowering the capital and operating costs of future GTL plants. There is also a continued focus to reduce the total cost and increase the efficiency of the cobalt catalyst used in the process through improvement of the performance and total value chain of the catalyst supplied.

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Property, plants and equipment

Natref refinery operational statistics⁽¹⁾

        Natref, a joint operation between Sasol Oil and Total South Africa (TSA), is an inland refinery, focused on producing refined petrol and distillate fuels. It is designed to upgrade relatively heavy crude oil with high sulphur content (sour) and yields about 91% white petroleum products. Refinery production includes petrol, diesel, propane, jet fuel, and multiple grades of bitumen, fuel oils, sulphur and various gases.

        The Mozambique-to-Secunda natural gas transmission pipeline, owned by Rompco, is a 26-inch carbon steel underground pipeline of 865 km. The pipeline starts from the natural gas Central Processing Facility (CPF) at Temane in Mozambique, and ends at the Pressure Protection Station (PPS) in Secunda. The instantaneous capacity of the pipeline is 123 bscf/a, with an annual average in excess of 108 bscf/a without any additional compression along the pipeline.

        In 2010, Rompco commissioned its first compressor station near Komatipoort in South Africa. This facility supplies midpoint compression and enables the pipeline to increase gas transportation up to an annual average of 153 bscf/a with an instantaneous pipeline capacity in excess of 159 bscf/a. In December 2014, Rompco completed the R1,6 billion project to construct a 128 km loop line in Mozambique to expand capacity, and allow for additional monetisation of gas in Mozambique. The Loopline I project increased annual capacity from 153 bscf/a to 169 bscf/a. Following approval of the pipeline variation plan by the Mozambique regulator, Instituto Nacional de Petróleo (INP), in July 2015, the Loopline II project has progressed to an advanced stage and a final investment decision (FID) was made in August 2015. Once commissioned, Loopline II will increase the pipeline capacity from 169 bscf/a to 191 bscf/a. Beneficial operation is expected to be achieved by January 2017.

        The inland transmission network of Gauteng is fed from the PPS in Secunda via a 30-inch carbon steel underground pipeline, which feeds into a second PPS at Nigel. The newly commissioned Gauteng Network Pipeline serves the inland network and increased the overall capacity of the Gauteng network from 82 bscf/a to 128 bscf/a. These pipelines supply various low pressure distribution areas, as well as some customers directly. The southern part of the inland network ends in Sasolburg.The Secunda, Witbank and Middelburg pipeline network receives methane-rich gas (MRG) from Secunda Synfuels Operations. The capacity of the network is approximately 11bscf/a. MRG is also compressed and fed into the Transnet Pipelines transmission pipeline to supply our customers in KwaZulu-Natal. The capacity of the network is approximately 23 bscf/a.

        In February 2015, we completed the development of the 175 megawatt gas-fired power generation plant in Mozambique, Central Termica de Ressano Garcia (CTRG), in partnership with the country's state-owned power utility, Electridade de Moçambique (EDM). The power plant has 18 gas engines with an installed capacity of 175 MW. CTRG generates electricity from gas supplied by SPT, IFC and CMH. The plant is producing as planned to deliver on the Power Purchase Agreement (PPA) signed with the off-taker EDM.

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Production capacity

Base Chemicals

Nature of operations and principal activities

        Base Chemicals is responsible for marketing commodity chemicals based on the group's upstream Fischer-Tropsch, ethylene, and propylene and ammonia value chains. The foundation of the business is feedstock advantage, scale, product quality and cost leadership. Our products include polymers, monomers, acrylates, industrial solvents, and ammonia derivatives such as fertilisers and explosives.

        The polymer and monomers products we market include ethylene and propylene monomers used for the production of polyethylene and polypropylene. Propylene is also used for butanol and acrylate production. Low density polyethylene (LDPE) is used in boutique shopping bags, bread bags and films (packaging, shrink wrapping, greenhouse covers, laminating). Linear low density polyethylene (LLDPE) is used in films (heavy duty, blending into LDPE), containers and lids (injection moulded) and rotomoulded products such as water and fuel tanks. Polypropylene (PP) is used in automotive parts, luggage, pipes, bottles, housewares, toys, woven sacks and flooring. Polyvinyl chloride (PVC) is used in pipes and fittings, cables, conduit, medical devices and consumer packaging.

        The industrial solvents products we market include alcohols and ketones, which include ethyl acetate, n-propanol, acetone, methyl ethyl ketone and mixed alcohols used in coatings, printing, packaging, plastics, fragrance and pharmaceuticals. Methanol, methyl isobutyl ketone and blends are used in aerosol paint and adhesive industries, polish, cosmetics, agriculture and mining. n-Butanol, glacial acrylic acid, butyl acrylate and ethyl acrylate are used in inks, adhesives, solvents and polymers (for example, superabsorbent polymers). Butyl glycol ethers and acetates are used in chemical intermediates.

        Other products we market include nitric acid, ammonium nitrate solution, sulphur, various grades of fertiliser, ammonium sulphate, explosives-grade ammonium nitrate, various packaged explosives, and explosive accessories (non-electronic and electronicinitiation systems), boosters and detonating cord. We also market caustic soda used in pulp and paper production, minerals beneficiation (platinum industry),

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water purification, soap manufacture and scouring of textiles. Sodium cyanide is used in the extraction of gold.

Principal markets

        The area with the highest sales volumes of our polymers products is South Africa. We also sell polymers in the rest of Africa, Europe, the Middle East and Asia. Over the past three years between 54% and 64% of our polymers products' revenue has been earned from sales into the South African market.

        We are the sole polymer producer of PVC, LDPE and LLDPE in South Africa. We have the leading share of sales of these products in South Africa, where the competition is from polymer imports primarily from Asian and Middle Eastern producers. We supply 160 ktpa ethylene and 110 ktpa propylene under contract to Safripol (Pty) Ltd (Safripol) in Sasolburg by pipeline for the production of HDPE and polypropylene, respectively. We compete directly with Safripol in the polypropylene market, where we have a large share of the South African market. We sell caustic soda primarily in South Africa into the pulp and paper, minerals beneficiation and soap and detergent industries. We are the sole local producer of sodium cyanide solution, which is sold to the local gold mining industry. Currently, we export polymers from our South African operations to the rest of the African continent, Southeast-Asia, Europe and South America. Product from the joint venture PETRONAS Chemicals LDPE plant in Malaysia is sold into Malaysia, India, China, Australia and New Zealand.

        The highest sales volumes of our solvents products are in Europe, the Middle East and Asia. We also sell into the rest of Africa, North America and South Africa. We market our products throughout the world, with a large proportion of our alcohols being distributed in Europe. We are a leading producer of solvents in South Africa. Our competition varies depending on the products sold and includes a number of major international oil and chemical companies. Our competitors include ExxonMobil, BP Chemicals, Chevron Phillips, INEOS, the Dow Chemical Company, Celanese and Eastman.

        We supply fertilisers to the Southern African farming community through bulk sales ex-factory gate, directly to end users or via distributors, co-operatives and competitors. We supply explosives and explosive accessories primarily to the Southern African mining industry, and export explosives-grade ammonium nitrate to the rest of Africa.

Seasonality

        Global polymer demand does not show any marked annual seasonality, although higher demand tends to arise in the third quarter of each calendar year as converters purchase more stock to cater for increased sales over the South African festive season.

        The global polymer industry is, however, cyclical in terms of margins earned, given irregular investment patterns caused by the large capital requirements and size of plants. The duration of a typical cycle is seven years and margins can vary from low trough conditions to extreme peak conditions. During tight supply/demand periods, which usually coincide with increases in economic activity as measured by gross domestic product (GDP), margins may increase disproportionately. Over time, margins reduce as investment is stimulated or as demand slows down in line with GDP. It may happen that excess capacity is installed, which results in margins falling sharply.

        Production and sales volumes of solvents products are generally not subject to seasonal fluctuations but tend to follow broader global industry trends. In terms of the global cyclical nature of our products, periods of high demand and higher prices are followed by an increase in global production capacity which can depress global margins. The global economic crisis has had a detrimental effect on our sales prices, and market demand has shown signs of contraction as a result of increased volatility, caused in

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part by the continuing European debt crisis, as well as slowing growth in China. In 2015, we benefited from higher sales volumes and lower costs. Sales volumes, normalised for the sale of our Solvents Germany and Sasol Polymers Middle East operations in 2014, increased by 2%. Sales prices of the dollar priced chemical basket declined, whilst the weaker rand/US dollar exchange rate positively impacted profit from operations.

Raw materials

        Feedstock for the production of ethylene, propylene and solvents is obtained from Mining and E&PI based on the cost of coal and natural gas and is converted into chemical products through our Secunda Synfuels and Secunda Chemicals Operations.

        Ethane and propane, used as feedstock for the cracker in Malaysia (12% shareholding) (PETRONAS Chemicals Olefins Sdn Bhd), is purchased from PETRONAS at a set price, which escalates annually in line with US inflation rates. These prices are not related to the oil price.

        Our joint venture operation in Malaysia PETRONAS Chemicals LDPE Sdn Bhd buys its ethylene feedstock from PETRONAS Chemicals Olefins at prices related to the Southeast Asian ethylene market.

Marketing channels

        We sell our polymers products in South Africa directly to customers using our own marketing and sales distribution channels. Our sales offices are in Johannesburg, Durban and Cape Town. For exports from South African operations, we sell directly into Southern Africa and through distributors and agents into East and West Africa, the Far East, Europe and South America.

        Our solvents products' operations are in 13 regional sales offices and nine storage hubs in South Africa, Europe, the Asia-Pacific region, the Middle East and the United States. We utilise a number of distributors and agents worldwide as an extension of our sales and marketing force to enable increased market penetration. A combination of product and account managers ensures continued, long-term relationships with our customers. Our in-house sales and administrative staff manage order processing, logistics and collection of payments as well as customer relationships. By using bulk supply facilities situated in China, Dubai, Europe, Singapore, South Africa and the United States, we can make timely deliveries to our customers.

        All fertiliser and explosives production activities are located in Southern Africa. We sell these products mainly within Southern Africa, with increasing exports into Western Africa. Fertiliser products produced at the South Africa Secunda manufacturing plant are limited to ex-works sales as per the agreement with the South African Competition Commission.

Factors on which the business is dependent

        Our plants operate using a combination of proprietary technology developed by Sasol, primarily by our Technology function, as well as technology licensed from various suppliers.

        Our acrylates and n-butanol technology is licensed from the Mitsubishi Chemical Company. Our maleic anhydride technology (utilised in the Sasol Huntsman joint venture) is licensed from Huntsman Corporation. We own the licence to the MiBK technology. The hydroformylation technology for use in our Safol and Octene 3 plants is licensed from Davy Process Technology.

Property, plants and equipment

        In South Africa, Base Chemicals' products are supplied by the Regional Operating Hubs that function as processing facilities. A new ethylene purification unit (EPU) in Sasolburg is yielding

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additional ethylene to support our polymer plants to run continuously. A new propylene stabilisation unit in Secunda, which achieved beneficial operation in June 2014, has improved the extraction of propylene to produce high-value chemicals.

        The following table summarises the main production capacities of the Regional Operating Hubs that produce polymer and monomer products marketed by Base Chemicals:

Production capacity at 30 June 2015

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        The following table summarises the main production capacities of the Regional Operating Hubs that produce solvent products marketed by Base Chemicals:

Production capacity as at 30 June 2015

        Approximately 90% of our production capacity is located at sites in South Africa and 10% in Germany. Our second MiBK plant at Sasolburg, with a nameplate capacity of 30 ktpa, started up in April 2010.

Performance Chemicals

Nature of operations and principal activities

        Performance Chemicals markets commodity and differentiated performance chemicals products which include the organics, inorganics and wax value chains. We work to further develop our strengths in product differentiation through technological leadership and a strong customer focus, which includes integration into applications. This ensures a business with higher margins and returns.

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        Among our products are surfactants and intermediates, alcohols, alkylates, co-monomers, specialty aluminas, waxes, phenolics, ammonia, cobalt catalyst, carbon as well as specialty gases.

Organics

        These products include linear alkyl benzene (LAB) which is used in LAB sulfonate-detergents, industrial and institutional cleaning products, N-paraffins and n-olefins are used in LAB, oxo-alcohols, detergents, industrial cleaning products, institutional cleaning products. Alcohols (linear and semi-linear C₆ to C₂₂) are used in surfactants, specialty plasticisers, detergents, industrial and institutional cleaning products, metalworking, flavours and fragrances, personal care, cosmetics, plastic additives, textiles and agriculture. Surfactants and intermediates are used in industrial and institutional products, metalworking, flavours and fragrances, personal care, cosmetics, plastic additives, textiles and agriculture. A portion of these products are used internally for the production of downstream surfactants.

        Our ethane-based cracker in Lake Charles, Louisiana, produces ethylene for the US market. A portion of the ethylene produced is used internally. Ethylene is also used in plastic manufacturing, alcohols and ethylene oxide. Co-monomers such as 1-hexene and 1-octene are used in the production of polyethylene. A portion of these products are used internally for the production of downstream surfactants.

Inorganics and catalysts

        These products involve mainly specialty aluminas and related products. The inorganics specialities are further processed by means of a variety of technical processes to adapt the product characteristics to highly specialised products. The inorganics division also manufactures shaped catalyst carriers, cobalt catalysts for current and future GTL ventures, as well as ultra-high purity alumina for sapphire applications as required for LED lighting.

Wax

        Wax products are being produced both from FT synthesis as well as via the traditional petrochemical route. The product range includes waxy oils, liquids paraffins, medium waxes, hard waxes, wax emulsions and petroleum jellies. Medium wax is used in the production of construction board, industrial applications such as tyres and paper coatings, candles, personal care, adhesives, as well as a number of other applications. Hard wax is used in bitumen modification, inks and coatings, hot melt adhesives and polymer processing. Waxy oils and liquid paraffins are used in drilling fluids, aerosols and chlorination for plastics.

Other products

        Ammonia is used for the manufacturing of explosives and fertiliser. Calcined coke is used for the manufacture of anodes for the aluminium, steel and titanium smelting industry.

Principal markets

        The highest sales volumes of our organic products are in Europe and North America, and we also sell in other regions including Asia and South Africa. The bulk of the production from the organic product group ends up as surfactants, either produced internally (our surfactants product group) or by other parties having acquired the intermediates from us. The bulk of these surfactants result in the making of detergents and industrial or institutional cleaning products. The main competitors include Shell and Cepsa in n-paraffins; and Huntsman Corporation, Cepsa and ISU in the LAB market.

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        Although a substantial portion of the alcohols and resultant surfactants products also end up in detergents and industrial and institutional cleaning products, these products also find wide application in industries such as metalworking, flavours and fragrances, personal care, cosmetics, plastic additives, textiles and agriculture. The main competitors include Shell and BASF, as well as a growing number of oleochemical alcohol producers in Southeast Asia.

        We sell ethylene, based on ethane as feedstock, to plastic manufacturers in the US Gulf Coast region. It is also used internally to manufacture alcohols and ethylene oxide.

        The highest sales volumes of our wax products are in Europe and South Africa, and we also sell into the Middle East, Asia and North America. The world market for waxes is about 4 500 ktpa and our main competitors in the commodity market are ExxonMobil, Shell, China Oil and Sinopec.

        Specialty aluminas and related products from the inorganic division are used in a broad range of applications, including catalyst support, raw material for ceramics, coatings, polymer additives and synthetic sapphires. Our competitors in aluminas include UOP and Sumitomo. Our highest sales volumes are in Europe and North America, but we also sell into Asia and South Africa.

Seasonality

        There is very little seasonality associated with our products or the markets in which they are sold. Cyclicality of this business is more related to the general chemical investment cycle, which impacts the supply side of the market equation. Many of the markets that we serve typically follow global and regional gross domestic product growth trends and are therefore impacted more by macroeconomic factors.

        The main feedstocks used in this business are kerosene, benzene, ethane, ethylene, oleochemical and aluminium (all purchased externally with the exception of some portion of our ethylene which is produced at our Lake Charles facility and the Fischer-Tropsch-based feedstock used for our South African alcohol, wax, ammonia, phenolics and co-monomer production). The prices of most of these materials are related to crude oil and energy pricing. They follow reasonably closely the movement of crude oil and energy pricing and, to a lesser extent, lauric oils. In view of the expected increase in oleochemical-based alcohol production, the differential between crude oil and lauric oils is expected to become increasingly important in determining competitiveness.

Marketing channels

        Over 90% of Performance Chemicals' products are sold directly to end-user customers. We use a limited number of distributors. Approximately 60% of our total sales are conducted under annual and, in some cases, multi-year contracts.

Factors upon which the business is dependent

        The business, especially our margin, is dependent on the supply and demand of the various products that we make as well as the feedstock costs. Demand growth is typically GDP driven with some exceptions of higher growth products and markets. Supply is primarily influenced by the build-up of new capacity in developing regions, especially China, India and Southeast Asia. Feedstock costs generally follow the trends of crude oil and vegetable oil.

        We are in the process of obtaining the relevant data required to comply with the EU REACH regulation, which became effective in June 2007. We have already complied with the first two major deadlines by registering our highest volume products (tiers one and two). We are now working on the next tier of products (volumes below 100 tons per year) with a deadline of 31 May 2018. We estimate that the total cost of compliance over the 10-year registration period amounts to €22 million. To date, we have incurred €15,8 million to comply with REACH.

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Property, plants and equipment

        The following table summarises the the main production capacities of the Regional Operating Hubs for products marketed by Performance Chemicals.

Production capacity at 30 June 2015

Group Functions

Nature of the operations and principal activities

        Our Group Functions focus on delivering fit-for-purpose, enabling and supportive business services and solutions to our integrated values chain with centralised accountability.

        Group Functions include Financial Control Services, Assurance Services, Supply Chain, Technology, Strategy, Corporate Finance, Business Development and Portfolio, Planning and Optimisation, Investor Relations, Information Management, Human Resources, Governance, Compliance and Ethics, Risk and Safety, Health and Environment, Public Affairs and Legal, IP and Regulatory Affairs.

        By grouping entities based on their capabilities and areas of specialisation, the new operating model allows Group Functions to focus on what they do best: ensuring governance, developing Group policies, providing strategic direction and delivering fit-for-purpose, enabling and supportive business services and solutions.

        Technological innovation is at the heart of Sasol's success. The Research & Technology, Capital Projects, Planning & Optimisation (P&O) and Engineering functions worked in the year to deliver technological improvements to our plants and processes as well as develop new technologies. By executing capital projects—among them mostly notably the Fischer-Tropsch wax expansion project, initial project work on the Lake Charles Chemicals Project, the Mozambique power plant and the Nigerian GTL facility—they supported the Group's strategy.

Legal proceedings and other contingencies

        Sasol Nitro—As previously reported, Sasol Nitro, formerly a division of Sasol Chemical Industries (Proprietary) Limited (SCI), concluded a settlement agreement with the Competition Commission of South Africa (the Commission) in May 2009. This settlement agreement was in full and final settlement of contraventions relating to price fixing, market division and collusive tendering.

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        In May 2012, 58 individual farmers, through facilitation of the Transvaal Agricultural Union, filed civil claims totalling approximately R52 million against SCI. The applicants alleged that they had been overcharged by SCI for products purchased, and that this overcharge arose from conduct which was admitted to by SCI in the settlement agreement concluded with the Commission in May 2009.

        In January 2015, SCI reached a settlement with all 58 farmers which constitutes a full and final settlement of this matter. The settlement was not material to the Group.

        Sasol Chemical Industries—complaint referral by Omnia—On 31 August 2011, Omnia Group (Pty) Ltd (Omnia) submitted a complaint against SCI to the Commission. The complaint related to, inter alia, allegations of excessive pricing for ammonia and price discrimination in respect of ammonia.

        On 7 March 2012, the Commission issued a notice of non-referral in respect of the complaint on the grounds that the conduct complained of was substantially the same as the conduct in respect of which the Commission had concluded a settlement agreement with Sasol in July 2010.

        On 5 April 2012, Omnia referred the complaint themselves to the South African Competition Tribunal (the Tribunal). Omnia alleged that:

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SCI charged Omnia an excessive price for ammonia during the period from May 2006 to December 2008;



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SCI had prevented Omnia from expanding within the markets for the supply of certain fertilisers during this period; and



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SCI had engaged in prohibited price discrimination in respect of ammonia.

        SCI did not agree with the allegations made, which were substantially similar to allegations in a civil claim for damages instituted by Omnia in 2009. SCI initiated its defence in both matters.

        On 6 October 2014, both the competition matter and the arbitration were commercially settled between SCI and Omnia and Omnia has withdrawn its complaint against SCI. The settlement constitutes a full and final settlement between SCI and Omnia. The settlement was not material to the Group.

        Sasol Wax    As previously reported, on 1 October 2008, the European Commission found that members of the European wax industry, including Sasol Wax GmbH, had formed a cartel and violated antitrust laws. A fine of EUR 318,2 million was imposed by the European Commission on Sasol Wax GmbH and was subsequently paid. On 15 December 2008, all Sasol companies affected by the decision lodged an appeal with the European Union's General Court against the decision of the European Commission on the basis that the fine is excessive and should be reduced. On 11 July 2014, the European General Court reduced the fine by EUR 168,22 million to EUR 149,98 million. The European Commission did not appeal the decision. Sasol accounted for this as a post balance sheet adjusting event in the 2014 income statement. The refund was received in August 2014.

        As a result of the fine imposed on Sasol Wax GmbH, on 23 September 2011, Sasol Wax GmbH and Sasol Wax International AG were served with a law suit in the Netherlands by a company to which potential claims for compensation of damages have been assigned to by eight customers. On 19 June 2015, Sasol and the plaintiffs concluded a full and final settlement. The settlement was not material to the Group. The plaintiffs have formally withdrawn the law suit against Sasol.

        Sasol Polymers—The Commission alleges that SCI charged excessive prices for propylene and polypropylene in the South African market from 2004 to 2007. Sasol disputes the Commission's allegations. In 2010, the matter was referred by the Commission to the Tribunal. The matter was heard before the Tribunal during 2013.

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        On 5 June 2014, the Tribunal released its decision in respect of Sasol Polymers' pricing of propylene and polypropylene. In its decision, the Tribunal made a finding against SCI in relation to its pricing of both propylene and polypropylene, for the period in question. In respect of purified propylene, the Tribunal imposed an administrative penalty of R205,2 million. In respect of polypropylene, the Tribunal imposed an administrative penalty of R328,8 million. In addition, the Tribunal also ordered revised future pricing of propylene and polypropylene.

        On 27 June 2014, SCI filed an appeal against the decision of the Tribunal with the South African Competition Appeal Court (CAC). On 11 July 2014, the Commission delivered a Notice of Cross-Appeal requesting the Competition Appeal Court to increase the administrative penalties imposed on SCI to R1 094 million for propylene, and R1 754 million for polypropylene.

        On 17 June 2015, the CAC handed down its judgment which upheld SCI's appeal. The CAC set aside the decision of the Competition Tribunal and replaced it with the order that the complaint referral was dismissed. Following the ruling, SCI reversed the provision of R534 million for potential penalties.

        On 23 July 2015, the Commission filed an application with the Constitutional Court in which it is seeking leave to appeal the decision of the CAC to the Constitutional Court. Sasol submitted its responding affidavit on 6 August 2015 and are awaiting a decision by the Constitutional Court. The outcome of this matter cannot be estimated at this point in time and accordingly, no provision was recognised at 30 June 2015.

Abuse of dominance investigation—Sasol Chemical Industries (Sasol Polymers), Sasol Synfuels, Sasol Oil and Sasol Limited

        In November 2011, Safripol (Pty) Ltd (Safripol) initiated a complaint with the Commission against SCI. In the complaint, Safripol alleged that SCI had contravened various sections of the Competition Act with regard to pricing and supply of propylene and ethylene. Safripol subsequently withdrew the complaint.

        The Commission however elected to continue with its investigation into the matter. Sasol was informed of the investigation in a letter from the Commission dated 30 July 2011. The Commission alleges that Sasol engaged in the following conduct:

•

Excessive pricing of propylene and ethylene required by Safripol;



•

Constructive refusal to supply scarce goods (namely propylene and ethylene);



•

Margin squeezing in respect of the supply of propylene and polypropylene; and



•

Price discrimination in relation to the sale of propylene and ethylene.

        The Commission stated in the abovementioned letter that as the alleged conduct relates to pricing of inputs, and may be linked with the pricing and supply of feedstock propylene and ethylene, their investigation extends to Sasol Limited, Sasol Oil, Sasol Synfuels and SCI. The period under investigation is from 2008 to date.

        On 22 December 2014, the Commission issued summons against employees of SCI, Synfuels, Sasol Oil and Sasol Limited whereby the Commission sought copies of documents and information from the employees. The responses in respect of all four summonses were submitted to the Commission on 31 March 2015. The outcome of this matter cannot be estimated at this point in time and accordingly, no provision was recognised at 30 June 2015.

        Sasol Oil—Commercial diesel    On 24 October 2012, the Commission referred allegations of price-fixing and market division against Chevron SA, Engen, Shell SA, Total SA, Sasol Limited, Sasol Oil,

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BP SA and the South African Petroleum Industry Association ("SAPIA") to the Tribunal for adjudication.

        The Commission is alleging that the respondents exchanged commercially sensitive information, mainly through SAPIA, in order to ensure that their respective prices for commercial diesel followed the Wholesale List Selling Price published by the Department of Energy. This is not a new matter and Sasol began engaging with the Commission in this regard in 2008 as part of its group-wide competition law compliance review, which preceded the Commission's investigation into the liquid fuels sector.

        Sasol has reviewed the Commission's referral documents and does not agree with the Commission's allegations. Sasol is assessing the legal options available to it. The outcome of this matter cannot be estimated at this point in time and accordingly, no provision was recognised at 30 June 2015.

        Sasol Mining—Claimed compensation for lung diseases    On 2 April 2015, 22 plaintiffs (one current and 21 former employees) instituted action against Sasol Mining (Pty) Limited in the High Court in Gauteng, South Africa, for allegedly having contracted lung diseases while working at its collieries. The plaintiffs allege that they were exposed to harmful quantities of coal dust while working underground for Sasol Mining and that the company failed to comply with various sections of the Mine Health and Safety Act, 1996, failed to comply with various regulations issued in terms thereof; and failed to take effective measures to reduce the exposure of mine workers to coal dust. All of which the plaintiffs allege increased the risk for workers to contract coal dust related lung diseases.

        This lawsuit is not a class action but rather 22 individual cases, each of which will be judged on its own merits. The plaintiffs seek compensation for damages relating to past and future medical costs and loss of income as well as general damages amounting to R82,5 million in total. Sasol Mining is defending the claim. It is not possible at this stage to make an estimate of the likelihood that the plaintiffs will succeed with their claim and if successful, what the quantum of damages would be that the court will award. Therefore, no provision was made at 30 June 2015.

        Other    From time to time, Sasol companies are involved in other litigation, tax and similar proceedings in the normal course of business. A detailed assessment is performed on each matter, and a provision is recognised where appropriate. Although the outcome of these proceedings and claims cannot be predicted with certainty, the company does not believe that the outcome of any of these cases would have a material effect on the group's financial results.

Competition matters

        Sasol continuously evaluates its compliance programmes and controls in general, and its competition law compliance programme and controls. As a consequence of these compliance programmes and controls, including monitoring and review activities, Sasol has also adopted appropriate remedial and/or mitigating steps, where necessary or advisable, lodged leniency applications and made disclosures on material findings as and when appropriate. These ongoing compliance activities have already revealed, and may still reveal, competition law contraventions or potential contraventions in respect of which we have taken, or will take, appropriate remedial and/or mitigating steps including lodging leniency applications.

        The Commission is conducting investigations into the South African liquid petroleum gas and polymer industries. Sasol continues to interact and co-operate with the Commission in respect of the subject matter of current leniency applications brought by Sasol, conditional leniency agreements concluded with the Commission, as well as in the areas that are subject to the Commission's investigations.

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Environmental Orders

        Sasol is subject to loss contingencies pursuant to numerous national and local environmental laws and regulations that regulate the discharge of materials into the environment and that may require Sasol to remediate or rehabilitate the effects of its operations on the environment. The contingencies may exist at a number of sites, including, but not limited to, sites where action has been taken to remediate soil and groundwater contamination. These future costs are not fully determinable due to factors such as the unknown extent of possible contamination, uncertainty regarding the timing and extent of remediation actions that may be required, the allocation of the environmental obligation among multiple parties, the discretion of regulators and changing legal requirements.

        Sasol's environmental obligation accrued at 30 June 2015 was R11 022 million compared to R11 013 million at 30 June 2014. Included in this balance is an amount accrued of approximately R3 204 million in respect of the costs of remediation of soil and groundwater contamination and similar environmental costs. These costs relate to the following activities: site assessments, soil and groundwater clean-up and remediation, and on-going monitoring. Due to uncertainties regarding future costs the potential loss in excess of the amount accrued cannot be reasonably determined.

        Although Sasol has provided for known environmental obligations that are probable and reasonably estimable, the amount of additional future costs relating to remediation and rehabilitation may be material to results of operations in the period in which they are recognised. It is not expected that these environmental obligations will have a material effect on the financial position of the group.

Regulation

        The South African government has, over the past 20 years, introduced a legislative and policy regime with the imperative of redressing historical, social, and economic inequalities, as stated in the Constitution of the Republic of South Africa, by way of the empowerment of historically disadvantaged South Africans (HDSAs) in the areas of ownership, management and control, employment equity, skills development, procurement, enterprise development and socio-economic development.

        The majority of our operations are based in South Africa, but we also operate in numerous other countries throughout the world. In South Africa, we operate coal mines and a number of production plants and facilities for the storage, processing and transportation of raw materials, products and wastes related to coal, oil, chemicals and gas. These facilities and the respective operations are subject to various laws and regulations that may become more stringent and may, in some cases, affect our business, operating results, cash flows and financial condition.

Empowerment of historically disadvantaged South Africans

Broad-based Black Economic Empowerment Act, 53 of 2003

        Sasol is well aligned with the economic transformation and sustainable development objectives embodied in the South African legislative and regulatory framework governing Broad-based Black Economic Empowerment (B-BBEE). The key elements of this framework are the B-BBEE Act, the Codes of Good Practice (the new Codes were gazetted on 11 October 2013, with a transition period until 30 April 2015) for B-BBEE issued by the Minister of Trade and Industry in terms of the Act (the Codes), as well as the Charters (i.e. the Mining Charter and Liquid Fuels Charter in South Africa addressing employment equity) adopted by the various sectors within which Sasol operates businesses and related scorecards. The measures discussed below reflect Sasol's commitment to giving meaningful effect to the letter and spirit of the B-BBEE legislative and regulatory framework.

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Sasol Inzalo share transaction

        The Sasol Inzalo share transaction is one of the major broad-based black economic empowerment initiatives undertaken by Sasol. Its components include employee trusts, the Sasol Inzalo Foundation, a transaction for selected participants, as well as a public offering targeted at black participants. It resulted in the transfer of beneficial ownership of 10% (63,1 million shares) of Sasol Limited's issued share capital before the implementation of this transaction to its employees and a wide spread of black South Africans (BEE participants).

        It has a tenure of 10 years and the effective date of the transaction for the Employee Trusts and the Sasol Inzalo Foundation was 3 June 2008. The effective date of the transaction for the selected participants was 27 June 2008. The effective date for the black public invitations was 8 September 2008. Refer to "Item 5A—Operating results—Sasol Inzalo share transaction".

The Mining Charter

        In October 2002, the government and representatives of South African mining companies and mineworkers' unions reached broad agreement on the Mining Charter, which is designed to facilitate the participation of HDSAs in the country's mining industry.

        The Mining Charter, together with a scorecard which was published on 18 February 2003 to facilitate the interpretation of and compliance with the Mining Charter (the scorecard), requires mining companies to ensure that HDSAs hold at least 15% ownership of mining assets or equity in South Africa within five calendar years and 26% ownership within 10 calendar years from the enactment of the new MPRDA which came into force on 1 May 2004.

        The Mining Charter was revised after the initial five year period and the revised Mining Charter became effective on 13 September 2010. The revised Mining Charter stated objectives include the:

•

Promotion of equitable access to the nation's mineral resources to all the people of South Africa;



•

Substantial and meaningful expansion of opportunities for HDSAs to enter the mining and minerals industry and to benefit from the exploitation of the nation's mineral resources;



•

Utilisation and expansion of the existing skills base for empowerment of HDSAs and to serve the community;



•

Promotion of employment and advancement of the social and economic welfare of mine communities and major labour sending areas;



•

Promotion of beneficiation of South Africa's mineral commodities; and



•

Promotion of sustainable development and growth.

        The scorecard reporting template released by the Department of Mineral Resources (DMR) also added further elements, not contained in the revised Mining Charter. The DMR confirmed during a submission to the Parliamentary Portfolio Committee that the Mining Charter targets for 2014 will also apply for the 2015 calendar year. The DMR indicated that Mining Charter 3 will be finalised by February 2016. It is uncertain whether the revised Mining Charter will be aligned with the revised Department of Trade and Industry Codes of Good Practice (DTI Codes) which came into effect during October 2013.

        The President of South Africa gazetted the new Codes of Good Practice for broad-based black economic empowerment (B-BBEE) on 11 October 2013, with a transition period until 30 April 2015. These codes provide a standard framework for the measurement of B-BBEE across all sectors of the

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economy, other than sectors that have their own sectoral transformation charters (e.g. the mining industry).

        Further, the B-BBEE Amendment Act was enacted on 27 January 2014. The B-BBEE Amendment Act makes compliance with the Codes of Good Practice compulsory for all industries. The B-BBEE Amendment Act provides that where any black economic empowerment legislation existed prior to the implementation of the B-BBEE Amendment Act, the B-BBEE Amendment Act will prevail. This is commonly referred to as the trumping provision. It is uncertain to what extent the revision of the Mining Charter, the revised DTI Codes and the trumping provisions will have an impact on our mining operations.

        On 11 October 2007, Sasol Mining announced the implementation of a BEE transaction valued at approximately R1,8 billion in terms whereof a black-woman controlled mining company called Ixia Coal (Pty) Ltd (Ixia), acquired 20% of Sasol Mining's shareholding through the issue of new shares. The transaction increased Sasol Mining's BEE ownership component by 20%. The effective date of the Ixia Coal transaction was 29 September 2010, when the remaining conditions precedent were met. Refer to "Item 5A—Operating results—Sasol Mining Ixia BEE transactions".

        We are a participant in transformation charters in the liquid fuels and mining industries in South Africa, pursuant to which we have undertaken to enable HDSA's to hold at least 25% equity ownership in our liquid fuels business and 26% equity ownership in our mining business by 2014. We have met these targets, with Sasol Mining's BEE ownership currently above 40%.

The Liquid Fuels Charter

        In 2000, following a process of consultation, the Department of Minerals and Energy (now the Department of Energy) and a number of companies in the liquid fuels industry, including Sasol Oil, signed the Liquid Fuels Charter (the Charter) which sets out the principles for the empowerment of HDSA's in the South African petroleum and liquid fuels industry. The Charter requires liquid fuels companies, including Sasol Oil, to ensure that HDSAs hold at least 25% equity ownership in the South African entity holding their operating assets by the end of a period of 10 years from the date of the signing of the Charter.

        In order to meet the equity ownership objective of the Charter, Sasol Limited concluded a black economic empowerment (BEE) transaction with an HDSA owned company, Tshwarisano LFB Investment (Pty) Ltd (Tshwarisano), in terms of which Sasol Limited disposed of 25% of its shareholding in Sasol Oil to Tshwarisano. Refer to "Item 5A—Operating results—Broad-based Black Economic Empowerment transactions".

        The Charter also requires liquid fuels companies to adopt policies to further other empowerment objectives of the Charter, among other things, employment equity, preferential procurement and skills development.

        The Charter further provides for the evaluation by the Department of Energy, from time to time, of the industry's progress in achieving the objectives of the Charter. Given the fact that the aforementioned 10 year period had run its course, the Department of Energy initiated a compliance audit in respect of the Charter in the latter part of the 2010 calendar year. Sasol Oil's compliance with the Charter was audited during the first half of the 2011 calendar year and the final industry report, albeit that the written report has not yet been issued to industry, has been discussed with industry by the Department of Energy on an aggregated basis.

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BEE policies and legislation

        The Broad-based Black Economic Empowerment Act, underpinned by the scorecard setting out clear targets for broad-based BEE, was promulgated into law on 9 February 2003. The scorecard measures the following areas:

•

ownership;



•

management and control;



•

employment equity;



•

skills development;



•

procurement;



•

enterprise development; and



•

socio-economic development.

        With effect from 1 July 2006, Sasol Oil met the 25% BEE ownership target, with Tshwarisano holding 25% of the shares in Sasol Oil in line with the Charter.

Employees

        In keeping with the spirit of the Charter, as well as the Employment Equity Act, we have set employment equity targets. This requires that advantageous treatment be given to HDSAs in aspects of employment such as hiring and promotion. Employment equity targets are set out and reviewed periodically to ensure that they are met. Special training and mentorship programmes are in place to create a work environment that is suited to the successful nurturing of HDSA staff.

Procurement

        Procurement is a crucial element of BEE as set out in the Charter, as well as in other industry charters and government policy. BEE procurement affords smaller industry players the opportunity to participate meaningfully in the sector. As prescribed in the Charter, HDSA owned companies are accorded preferred supplier status as far as possible.

Corporate social investment

        We focus on facilitating the socio-economic development of the communities in which we operate, through partnerships with key stakeholders in these communities.

        Social investment is presently channelled into three main areas:

•

Education and skills development: developing skills and providing resources for schools, with a focus on science, technology, engineering and mathematics, providing undergraduate bursaries, supporting university collaborations including postgraduate studies, investing in youth development with a focus on entrepreneurial and vocational skills development, as well as developing technical skills and capacity;



•

Community development: investing in the communities in which we operate through socioeconomic and local development programmes, including health, infrastructure, sport and culture, and enterprise development; and



•

Environment: protecting the environment, through initiatives including sustainable water use and loss prevention, energy access and security, creating value from waste, air quality improvements, and biodiversity.

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The Restitution of Land Rights Act, 22 of 1994

        Our privately held land could be subject to land restitution claims under the Restitution of Land Rights Act, 22 of 1994. Under this act, any person who was dispossessed of rights to land in South Africa as a result of past racially discriminatory laws or practices is granted certain remedies, including, but not limited to:

•

restoration of the land claimed with or without compensation to the holder;



•

granting of an appropriate right in alternative state-owned land to the claimant; or



•

payment of compensation by the state or the holder of the land to the claimant.

        The Restitution of Land Rights Amendment Act became law in February 2004. This act would entitle the minister to expropriate land in the absence of an agreement. Such an expropriation could be for restitution or other land reform purposes. Compensation payable to the owner of the land would be subject to the provisions of the Expropriation Act 63 of 1975 and section 25(3) of the South African Constitution which provides, in general, that compensation must be just and equitable.

        All claims had to have been lodged with the Land Claims Commission by 31 December 1998. The Restitution of Land Rights Amendment Bill of 2013 that was passed by the National Assembly and the National Council of Provinces on 25 February 2014 and 27 March 2014, respectively, reopens the period for filing of land claims by extending the period until 31 December 2018.

        Sasol has been notified of a potential land claim over a property that belongs to Sasol South Africa (Pty) Ltd, namely the farm Goedehoop 301 IS. Although we have not received any written confirmation in respect of the remedy that will be granted to the claimants in this matter, the Land Claims Commission did indicate verbally that they acknowledge that the land is not suitable for restoration of ownership and all indications are that compensation may be paid to the claimants by the government.

        In 2012, Sasol received a notification of a further land claim instituted over parts of the farm Grootvlein 293 IS. Sasol Mining is the owner of Portions 13 and 29 of the farm Grootvlein 293 IS. At this stage it is unclear which portions of the farm fall within the land claim and whether the claim has any merit.

        In February 2013, Sasol received a notification of a further land claim instituted over Portion 8 of the farm Rietvley 320 IS that belongs to Sasol South Africa (Pty) Ltd. A new ash dam will be partly constructed on this property. This property is already traversed by a Sasol Mining conveyor belt and another conveyor belt is expected to cross the property in future. Sasol has engaged with the Land Claims Commission and the claimants on this issue to resolve the matter.

        Another piece of land was identified to be sold to the Land Claims Commission in place of Portion 8 of Rietvley 320 IS, subject to the withdrawal of the claim.

Regulation of mining activities in South Africa

The Mineral and Petroleum Resources Development Act (MPRDA)

        A fundamental shift in the regulation of mineral resources was brought about by the MPRDA, which came into effect on 1 May 2004. As a result of this legislation, South Africa transitioned from private ownership of minerals to a system where the state will act as the custodian of all mineral resources, and is entrusted with the responsibility of regulating the mining industry to the benefit of the nation. The MPRDA recognises that the mineral resources of the country are the common heritage of all South Africans and therefore belong to all citizens of South Africa. The MPRDA introduced a comprehensive statutory framework whereby the state, as guardian of mineral resources, may grant prospecting and mining rights to applicants who comply with the required minimum criteria. The

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MPRDA also introduced extensive new requirements for prospecting- and mining work programmes and the prescribed social and labour plans which accompany applications for mining rights. The MPRDA adopts the environmental management principles and environmental impact assessment provisions of the National Environmental Management Act (NEMA).

        Whilst the implementation of the 2008 MPRDA Amendment Act had some impact on our business, the 2013 MPRD Amendment Bill initially contained several clauses which caused significant concerns for Sasol Mining, as well as the mining industry as a whole. The Department of Mineral Resources eventually reached a compromise with the industry and changed the wording of almost all of the contentious provisions. Although far from ideal, these amendments were acceptable to most industry members. The provision which entitles the government to a free carried interest in all new petroleum ventures still remains a concern. A number of critical issues will be dealt with in the new regulations to be published under the MPRD Amendment Bill. These regulations are not yet available and their impact on Sasol remains unclear.

Mining rights

        All Sasol Mining's old order prospecting and mining rights have been converted to new order rights. Sasol Mining's mining rights in respect of its Mpumalanga operations (Secunda Complex) as well as its Sigma: Mooikraal operations in the Free State have been extended to 2040, and can be renewed for further periods of 30 years at a time.

        We are a participant in transformation charters in the mining industry in South Africa, pursuant to which we have undertaken to enable historically disadvantaged South Africans to hold at least 26% equity ownership, by 2014, in our mining business. We have met these targets, with Sasol Mining's BEE ownership currently above 40%. Sasol Mining achieved an overall score of 99% for its Secunda operations and 90% for Sigma: Mooikraal operations with regard to its Mining Charter compliance for the 2014 calendar year. The scores were verified by an independent verification agency during February 2015. Further, royalties from mining activities are payable to the state, as from 1 March 2010, under provisions contained in the Mineral and Petroleum Resources Royalty Act, 28 of 2008, and the Mineral and Petroleum Royalty Administration Act, 29 of 2008. The most significant feature of the legislation is that the royalty is determinable in accordance with a formula-based system. The impact on Sasol Mining for the year ended 30 June 2015 is a cost of R106,6 million (2014—R51,9 million). The royalty is deductible for normal income tax purposes.

Regulation of pipeline gas activities in South Africa

The Gas Act

        The Gas Act, which is currently being revised, came into effect on 1 November 2005. The Gas Act regulates matters relating to gas transmission, storage, distribution, liquefaction and re-gasification activities. Among its stated objectives are:

•

promoting the efficient development and operation of the respective facilities and the provision of respective services in a safe, efficient, economically and environmentally responsible way;



•

promoting companies in the gas industry that are owned or controlled by HDSAs;



•

promoting competition and investment in the gas markets; and



•

securing affordable and safe access to gas services.

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        The Gas Act provides for the National Energy Regulator of South Africa (NERSA) to regulate the pipeline gas industry and the issue licences for a range of activities including:

•

the construction, conversion or operation of gas transmission, storage, distribution, liquefaction and re-gasification facilities; and



•

trading in gas.

        NERSA has the authority to determine maximum prices for distributors, reticulators and all classes of consumers, where there is inadequate competition as contemplated in the South African Competition Act. The Gas Act gives NERSA the authority to impose fines and other punitive measures for failure to comply with the licence conditions and/or the provisions of the Gas Act.

The National Energy Regulator Act

        The National Energy Regulator Act came into operation on 15 September 2005. The National Energy Regulator Act provides for the establishment of a regulator to regulate the piped gas, petroleum pipeline and electricity industries. On 1 November 2005, NERSA, pursuant to the National Energy Regulator Act, came into existence.

        A draft National Energy Regulator Amendment Bill has been published for comment and Sasol has subsequently commented on the proposed changes.

        All construction activities relating to the distribution and transmission pipeline networks of Sasol Gas are undertaken, subject to the relevant construction licences as prescribed by the Gas Act. All gas trading, distribution and transmission activities of Sasol Gas are undertaken, subject to the applicable licences issued by NERSA.

The Mozambique Gas Pipeline Agreement (Regulatory Agreement)

        This Mozambique Gas Pipeline agreement entered into between Sasol Limited and the South African Government, represented by the Minister of Minerals and Energy, and the Minister of Trade and Industry in connection with the introduction of natural gas by pipeline from Mozambique into South Africa, was incorporated into the Gas Act through the reference thereto in Section 36 of the Gas Act. The Gas Act provides that the terms of the agreement bind the Gas Regulator for a period until 10 years after natural gas is first received from Mozambique (26 March 2004). From the date of the conclusion of the agreement, the terms of the agreement relating to the following matters constitute conditions of the licences to be issued to Sasol Gas and Rompco under the Gas Act:

•

our rights and periods granted in respect of transmission and distribution of gas;



•

third party access to the transmission pipeline from Mozambique and to certain of our pipelines;



•

prices we charge for gas;



•

our obligation to supply customers, distributors and reticulators with gas; and



•

the administration of the agreement.

        The 10 year regulatory dispensation negotiated with the South African government with respect to the supply of Mozambican natural gas to the South African market expired in March 2014. Accordingly, on 25 March 2014, the transmission tariffs for piped gas and gas prices charged by Sasol Gas were subject to regulation by NERSA. In this regard, NERSA has promulgated the tariff methodology that will apply to gas transmission and storage operations. NERSA has published the methodology that will apply to the approval of maximum prices in terms of the Gas Act.

        Pursuant to the approved tariffs and maximum prices, Sasol Gas implemented a standardised pricing mechanism in its supply agreements with customers in compliance with the applicable regulatory

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and legal framework. Seven of Sasol Gas' largest customers initiated a judicial review of the NERSA decisions relating to its maximum price and tariff methodologies and NERSA's decision on Sasol Gas's maximum price application. The review application proceedings have been completed and Sasol is awaiting the judgement. It is uncertain how the outcome of this review application will affect the tariffs and gas prices that Sasol Gas charges.

The Gas Regulator Levies Act

        The Gas Regulator Levies Act came into effect on 1 November 2005. It provides for the imposition of levies by the Gas Regulator on the amount of gas delivered by importers and producers to inlet flanges of transmission or distribution pipelines. These levies will be used to meet the general administrative and other costs of the gas regulation activities of NERSA and the functions performed by NERSA in this regard. During the NERSA financial year which ended on 31 March 2015, Sasol Gas paid a total amount of R67 million (2014—R52 million) in levies under this Act. For the NERSA financial year ending on 31 March 2016, the levies promulgated are R0,3273/GJ. It is anticipated that approximately R58 million will be paid in levies during this period.

Regulation of petroleum-related activities in South Africa

The Petroleum Products Amendment Act (Amendment Act)

        The Amendment Act which became effective in 2006 prescribes that a person may not be involved in the activities of manufacturing, wholesaling, holding or development of retail sites and retail sale of petroleum products without the appropriate licence having been issued in terms of the Amendment Act. The Amendment Act deems any person, who was, at the time of commencement of amending the Petroleum Products Act in 2003, involved in the aforementioned activities, to be a holder of a licence for that activity, provided such person has applied for a licence. With the exception of licences for new retail site developments, applications are approved per site on an on-going basis. Sasol Oil is not at risk from a licensing perspective.

        The Amendment Act entitles the Minister of Energy to regulate the prices, specifications and stock holding of petroleum products and the status in this regard is as follows:

•

A regulatory price review was conducted by the Department of Energy which resulted in new price calculation methodologies. The new pricing structures came into effect in December 2013;



•

Changes to align South African liquid fuels specifications with those prevailing in Europe are currently under discussion. It is uncertain as to when these new specifications, which pertain to all liquid fuels consumed in South Africa, will be effective. Compliance with these new specifications will require substantia capital investments at both Natref and Secunda Synfuels Operations. The amount of capital investment required has not yet been finalised and discussions regarding cost recoveries and/or incentives are on-going with the South African government; and



•

Regulations to oblige licensed manufacturers and/or wholesalers to keep minimum levels of market-ready petrol, diesel, illuminating paraffin, jet fuel and liquid petroleum gas (LPG) are currently under consideration by the Department of Energy. No indications on volumes, cost recovery and compensation mechanisms available as yet.

        The Amendment Act authorises the Minister of Energy to promulgate regulations and we cannot assure you that the application of these provisions of the Act, or the promulgation of regulations in terms thereof, will not have a material adverse effect on our business, operating results, cash flows and financial condition.

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The Petroleum Pipelines Act

        The Petroleum Pipelines Act (the Act), which became effective in 2005, establishes a petroleum pipelines authority, namely NERSA, as custodian and enforcer of the regulatory framework applicable to petroleum pipelines, storage facilities and loading facilities.

        The Act provides that no person may construct, or operate, a petroleum pipeline, loading facility or storage facility without a licence issued by NERSA. It enables NERSA to impose conditions on such licences including the setting and approval of petroleum pipeline, storage facility and loading facility tariffs for third party access.

        We have been granted licences for our regulated facilities. Applications for tariffs have been submitted in terms of the NERSA rules. The applications are of an interim nature, as Sasol Oil is not yet in a position to fully comply with the applicable regulatory information request from NERSA. Sasol Oil has agreed a process with NERSA to implement the NERSA prescribed Reporting Regulatory Manual that will enable NERSA to fully execute its regulatory mandate in this regard.

        It is unlikely that the tariffs, once approved, will have a material financial impact on Sasol Oil.

        The Act authorises the South African Minister of Energy to promulgate regulations and we cannot assure you that the application of these provisions of the Act, or the promulgation of regulations in terms thereof, will not have a material adverse effect on our business, operating results, cash flows and financial condition.

Safety, health and environment

Regions in which Sasol operates and their applicable legislation

South Africa

        The major part of our operations is located in South Africa. We operate a number of plants and facilities for the manufacture, storage, processing and transportation of chemical feedstock, products and wastes. These operations are subject to numerous laws and regulations relating to safety, health and the protection of the environment.

Environmental regulation

        The Constitution of the Republic of South Africa (the Constitution) provides the framework for the environmental legislation in South Africa. Section 24 of the Constitution enshrines the right of all citizens to an environment that is not harmful to their health and well-being and provides individuals with a right to the protection of the environment. The Constitution further provides that these rights can be enforced through reasonable legislative and other measures to prevent pollution and degradation, to promote conservation and to secure ecologically sustainable development.

        Below is an analysis of some of these laws, which are material to our operations.

        National Environmental Management Act.    The Act regulates environmental authorisation requirements to manage the environmental impact associated with certain identified activities, as well as, compliance enforcement. These governance and enforcement measures also extend to specific environmental management acts, such as the Waste Act, the Water Act and the Air Quality Act. The Act principally imposes a duty of care on persons who have or may pollute or degrade the environment and other responsible parties to take reasonable measures to prevent and remediate environmental damage, protects workers' rights and provides for control over emergency incidents. Non-compliances with provisions on, amongst other things, the duty of care and reporting of significant incidents, are regarded as offences under the Act.

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        Mineral and Petroleum Resources Development Act.    Environmental governance with respect to mining, prospecting, production and exploration is now primarily regulated under the National Environmental Management Act, which makes provision for the effective management of impacts associated with mining activities. Environmental authorisations as well as an environmental management programme or plan (EMP) must be compiled and approved by the Department of Mineral Resources, and regularly reviewed. The EMP is required to cover potential environmental as well as socio-economic impacts. Financial provision for the rehabilitation or management of negative environmental impacts is required.

Water protection

        The National Water Act (the Act) provides for the equitable allocation of water for beneficial use, sustainable water resource management and the protection of the quality of water resources. The Act establishes water management procedures and protects water resources through the licensing of various uses of water. It also includes provisions for pollution prevention, remediation requirements and emergency incident management. The Department of Water Affairs and Sanitation is implementing a pricing strategy (in future to include a Waste Discharge Charge System) aimed at allocating the appropriate price for the use of water, which may have a significant impact on operational costs. Sasol is supporting the Department of Water Affairs and Sanitation in developing an implementation plan for the National Water Resource Strategy 2.

        A significant part of our operations, including mining, chemical processing and others, require use of large volumes of water. South Africa is generally an arid country and prolonged periods of drought or significant changes to current water laws could increase the cost of our water supplies or otherwise impact our operations.

Air quality protection

        The National Environmental Management: Air Quality Act.    Through ambient and minimum point source emission standards and an associated atmospheric emission licensing system, the Department of Environmental Affairs (the DEA) imposes stricter standards on air quality management in South Africa. The minimum point source emission standards imposed different standards for new and existing facilities. New facilities must comply with the standards immediately. Existing facilities had five years from 1 April 2010 within which to comply with standards imposed thereon and must comply with the standards imposed for new facilities within 10 years. Compliance with the minimum point source emission standards will result in significant capital and operational costs.

        Sasol recently submitted extensive comments on the draft offset policy published by the Department of Environmental Affairs.

        The DEA has declared the Vaal Triangle (where the Sasolburg plant is situated) and the Highveld area (where our Secunda operations are situated) as Priority Areas. The Vaal Triangle and Highveld Priority Area Air Quality Improvement Plans are being implemented. Compliance with the provisions of these plans will have significant cost implications.

        Climate change management:    Some of our processes in South Africa, especially coal gasification, result in relatively high carbon dioxide emissions. South Africa is considered a developing country in terms of the United Nations Framework Convention on Climate Change and, accordingly, is largely exempt from the emissions reductions required. In 2009, the South African government committed to an emission reduction pledge under the voluntary Copenhagen accord which has since been incorporated into the National Climate Change Response White Paper published in November 2011. In May 2013, a second carbon tax discussion document was published for comments and early in 2014 it was indicated that the carbon tax would be integrated with the carbon budget as contemplated in the National Climate Change Response White Paper. Currently the Department of Environmental Affairs

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is in the process of allocating carbon budgets to specific companies and defining sectoral and sub-sectoral aspirational goals termed desired emission reduction outcomes. In February 2015, National Treasury in South Africa indicated in its budget review that a Carbon Tax Bill would be published for public comment mid-year with potential implementation of the carbon tax from 1 January 2016. We continue to engage with the South African government on the carbon tax issue. A tax review committee has been formulated to review the design and implementation of the carbon tax.

Waste

        The National Environmental Management: Waste Act.    The act contains comprehensive legislative requirements on all aspects of waste management and regulates contaminated land management. The act imposes various duties on holders of waste including prohibitions on waste disposal. These duties are potentially far reaching as waste is broadly defined. The act also requires licences to be obtained for the commencement, undertaking or conducting of waste management activities. Further, the act regulates waste information systems and provides for specific regulation of priority wastes. New landfill prohibition standards were introduced in 2013, which will be phased in over the next 15 years.

Hazardous substances

        Hazardous Substances Act.    This act provides for the control and licensing of substances that may cause injury, ill-health or death to human beings by reason of their toxic, corrosive, irritant, strongly sensitising or flammable nature. Regulations have also been proposed providing for the adoption of the United Nations Globally Harmonised System for the classification and labelling of chemicals. This will facilitate alignment with existing international practices.

Health and safety

        Occupational Health and Safety Act.    This act covers a number of areas of employment activity and use of machinery in South Africa, excluding mining activities. This act and specific regulations thereunder impose various obligations on employers and others to reasonably and practicably maintain a safe and healthy workplace and minimise the exposure of employees and the public to workplace hazards, and establishes penalties and a system of administrative fines and other measures for non-compliance.

        Mine Health and Safety Act.    The purpose of this act is to protect the health and safety of persons at mines by requiring that employers and others ensure that their operating and non-operating mines provide a safe and healthy working environment, determining penalties and a system of administrative fines and other enforcement measures for non-compliance. It specifically authorises the Minister of Mineral Resources to restrict or stop work and requires an employer to take steps to minimise health and safety risks at any mine.

        Compensation for Occupational Injuries and Diseases Act.    The purpose of this act is to provide for compensation for disablement caused by occupational injuries or diseases sustained or contracted by employees in the course of their employment, or for death resulting from such injuries or diseases. This act is administered by the Department of Labour which manages a compensation fund to which employers contribute, directly or indirectly.

        Occupational Diseases in Mines and Works Act.    This act relates to the payment of compensation in respect of certain diseases contracted by persons employed at mines. Any mine (including the Sasol Mining operations) at which risk work takes place is deemed to be a controlled mine in respect of the employees for whom the employer is required to make payments to the fund for occupational diseases, in order to meet relevant claims. For further information, refer to "Item 6.C—Board Practices—The risk and safety, health and environment committee".

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Germany and Italy

        In Germany and Italy, we operate a number of plants and facilities for the manufacture, storage, processing and transportation of chemical feedstock, products and waste. These operations are subject to numerous laws and ordinances relating to safety, health and the protection of the environment. The objectives and requirements of these legal frameworks are largely consistent with that of the South African Framework, although more established and entrenched in some respects.

Hazardous substances

        Regulation of hazardous substances.    Provisions for the protection of humans and the environment against the harmful effects of hazardous substances and preparations are provided in the Chemicals Acts, and related ordinances on the Prohibition of Certain Chemicals and Hazardous Incidents. All hazardous substances, as per the scope identified in the European Union (EU) REACH Regulation, are subject, to a registration and notification obligation before they can be brought onto the market. Hazardous substances and mixtures must be classified, labelled and packed in accordance with the EU Classification, Labelling and Packaging Regulation. Further regulations prohibiting and limiting manufacture, marketing and use also apply.

United States

        In the United States, we operate a number of plants and facilities for the storage and processing of chemical feedstock, products and wastes. These operations are subject to numerous laws and ordinances relating to safety, health and the protection of the environment.

Environmental compliance

        Sasol's US operations and growth projects are subject to numerous federal, state, and local laws and regulations that regulate the discharge of materials into the environment or that otherwise relate to the protection of human health and the environment. As with the chemical industry, generally, compliance with existing and anticipated environmental, health, safety, and process safety laws and regulations increases the overall cost of business. These laws and regulations are expected to continue to require our operations and projects to make significant expenditures of both a capital and expense nature.

Canada

Oil and natural gas production

        The British Columbia Petroleum and Natural Gas Act (PNGA) and Oil and Gas Activities Act (OGAA) are the primary sources of regulatory controls over our interests in oil and gas producing areas in Canada. These statutes include a wide array of tenure, operational and public review requirements. A common theme of the requirements is that producers must hold applicable licences, leases, permits and other approvals. In 2014, British Columbia introduced mandatory public disclosure of hydraulic fracturing fluid ingredients.

Water protection

        Substantial volumes of water are needed for oil and gas production in British Columbia. Extraction of water from ground and surface sources are regulated by the OGAA, PNGA and the British Columbia Water Act, the last of which will be replaced by the Water Sustainability Act which is expected to come into effect in 2016. Water extraction wells are subject to requirements governing well tenure and location, construction and aquifer management. The piping of water to exploration or

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production sites is governed by special approval requirements (covering fisheries, pipeline construction, tenure and surface rights issues).

Emissions

        British Columbia's Environmental Management Act (EMA) prohibits emissions, discharges and the like into the environment without prescribed permits. Several permits apply to activities at the British Columbia subject properties (the Montney assets), covering releases to air and water.

Contaminated sites

        Soil and groundwater contamination in the British Columbia oil and gas industry is regulated primarily by the contaminated sites regime in the EMA and its supporting Contaminated Sites Regulation.

Environmental assessment

        Further development of the Montney Asset might trigger one or both of provincial and federal environmental assessment requirements. Environmental assessments commonly require substantive public review and Aboriginal (or First Nations and Metis group) consultation. To date, none of the activities undertaken in relation to the British Columbia operations has triggered an environmental assessment.

Aboriginal consultation

        A unique aspect of Canadian law is the recognition of Aboriginal rights. The Crown (the federal or provincial government) is obliged to consult with, and where appropriate, accommodate, Aboriginal groups in making governmental decisions which may infringe on Aboriginal rights. This duty continues to evolve in response to judicial decisions.

Occupational and workplace safety

        The British Columbia Workers Compensation Act and supporting regulations and policies set out detailed rules respecting workplace safety in British Columbia. Special rules (in regulations to this act) apply to the oil and gas sector.

Mozambique

        Petroleum Rights    Petroleum operations are regulated by the Petroleum Law (Law 21/2014). A second draft of the Regulations under the new law was distributed during July 2015 and the new Regulations are expected to be passed before December 2015. The Minister of Mineral Resources and Energy is responsible for petroleum operations. The National Petroleum Institute administers and regulates petroleum operations on behalf of the Mozambique Government.

        Under the Petroleum Law the national oil company, Empresa Nacional de Hidrocarbonetos (ENP), is appointed as the State's representative in all matters relating to petroleum activities and is entitled to participate in all petroleum operations. At least 25% of oil and gas produced in Mozambique, under new licences, should be allocated to the domestic market.

        Mineral Rights    The Mining Law (Law 20/2014) regulates mining activities and the utilisation of mineral resources in Mozambique. All mineral resources belong to the State. The Ministry of Mineral resources is responsible for mining activities and the National Directorate of Mines administers and regulates mining activities.

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        Environmental, health and safety regulations.    The Ministry for the Coordination of Environmental Affairs is responsible for environmental affairs in Mozambique. A National Environmental Management Programme is the policy document outlining the priorities for environmental management and sustainable development in Mozambique. This programme contains a National Environmental Policy, a proposal for Framework Environmental Legislation and an Environmental Strategy.

        The Environmental Law (Law 20/1997) provides a legal framework for the use and correct management of the environment and its components and to assure sustainable development in Mozambique. The Petroleum Industry in Mozambique is regulated by both Environmental Impact Assessment Regulations (Decree 45/2004 and its update Decree 42/2008) and the Environmental Regulations for Petroleum Operations (Decree 56/2010).

        An Environmental Impact Assessment (EIA) is a legal requirement under the Framework Environmental Law for any activity which may have direct or indirect impacts on the environment. Article 2 of Decree no. 45/2004 states that EIA's are required for oil, gas and mineral resource-related activities or developments. The Environmental Regulations for Petroleum Operations (Decree 56/2010) govern EIA for petroleum operations.

Environmental Regulations for Petroleum Operations (Decree 56/2010)

        Regulations on Environmental Quality and Emission Standards (Decree 18/2004), with additions and amendments in supplement (Decree 67/2010) contains the EIA requirements for petroleum operations and the associated prevention, control, mitigation and rehabilitation procedures to be followed.

        The Regulations aim to establish the standards for environmental quality and for effluents release in order to assure the effective control and maintenance of the admissible standards of concentration of polluting substances on the environmental components.

        The Regulations on Solid Waste Management establish the rules on the production, emission or disposal in the soil and subsoil, in water or the air, of any toxic or polluting substance, as well as the execution of activities that accelerate deterioration of the environment, in order to avoid or minimize their negative impact on health and the environment.

        The Regulations on Water Quality for Human Consumption (Ministerial Diploma 180/2004) established the quality parameters and control procedures for water intended for human consumption. The purpose of these regulations is to protect consumers from the harmful effects of contamination in the water supply system.

        The Petroleum Act (Law 21/2014) requires holders of exploration and production rights to conduct petroleum operations in compliance with environmental and other applicable legislation. The law makes provision for compensation to be paid under general legislation by the holder of a right to conduct petroleum operations to persons whose assets are damaged. The law establishes strict liability for the holder of the right who causes environmental damage or pollution.

Qatar

        In Qatar, we participate in a joint venture involving a number of plants and facilities for the storage and processing of chemical feedstock, products and wastes. These operations are subject to numerous laws and ordinances relating to safety, health and the protection of the environment.

        The Oil and Gas industry, including LNG, is overall regulated by the Natural Resources Law, 3 of 2007, with regards to the Exploitation of Natural resources.

        Environmental regulation.    All public or private development plans, including industrial, agricultural and infrastructure projects are required to follow the Environmental Protection Law and

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obtain an environmental authorisation permit from the Ministry of Environment (MOE). The MOE is also responsible for environmental protection and conservation in the State of Qatar.

        The Environmental Protection Law, Decree-Law No. (30) of 2002 is aimed at protection of the environment, prevention of pollution (short-and-long-term) and sustainable development by providing for development of natural resources for the benefit of the present and future generations, the protection of society, human health and other living creatures, and protection of the environment from the damaging effect of activities outside of the State of Qatar.

        The Executive By-Law for the Environmental Protection Law, issued via the Decree Law No. 30 for the Year 2002 (the By-Law) stipulates specific standards and regulations to meet the objectives of The Environmental Protection Law. This includes regulations on determining the environmental impact of projects (requirements to conduct an EIA), emergency response plans for environmental disasters, hazardous wastes and materials, air pollution, water pollution, protection of marine environment. It also includes annexure regulations on:

•

Air protection.  Prescribing standards for air quality for different industries;



•

Water protection.  Prescribing standards for pollutants and limitations for discharges into the water; and



•

Waste.  Regulates the management and trans-boundary movement of hazardous wastes. In addition it regulates the import, production, handling and transportation of hazard materials including the categorisation, labelling, separation and packing of hazardous materials.

        Consent to Operate (CTO).    This is ORYX GTL's operating permit issued under the Authority of Law, 30 of 2002, and its By-Law No. 4 of 2005 and is renewable on an annual basis. This permit stipulates general monitoring requirements, waste water quality standards, point source air emission standards, overall noise level limit, handling and storage of hazardous wastes, chemical use, records and emergency response programmes.

        The State of Qatar implemented a Clean Development Mechanism (CDM), an initiative to reduce the emission of greenhouse gases. Gas flaring mitigation and the reduction of carbon emissions were among the two key areas focused on by the State of Qatar as part of its commitment towards CDM.

        Occupational Health and Safety Administration (OSHA).    There is no regulatory authority for safety or health in Qatar and therefore ORYX GTL used the internationally recognised OSHA standards as guidelines where applicable.

Gabon

        On 15 September 2014, the Gabon government enacted a new Hydrocarbon Law (law No. 011/2014) (the 'New Code"). The new law repeals the former petroleum law governing hydrocarbons exploration and exploitation activities in Gabon, and aims to establish a new regime governing hydrocarbons exploration, exploitation and transportation activities.

        All existing Production Sharing Contracts (PSCs) remain in force until their expiry and shall remain governed by the old hydrocarbons law. However, the ambiguous wording of some provisions under the New Code could be broad enough to apply to existing PSCs. Until the implementation regulations are published providing clarification in this regard it can however be assumed that the changes brought in by the New Code do not apply to existing PSCs.

        Notwithstanding the foregoing, companies holding existing PSCs will be required to comply with a number of additional obligations:

        Abide by the natural gas flaring prohibition within one year after the law enters into force;

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        The flaring of natural gas is prohibited and international oil companies performing hydrocarbons exploration and exploitation activities in Gabon must conform to this prohibition within one year of the New Code entering into force;

        Natural gas marketing is an activity carried out solely by the Government;

        Provide for diversified investment (PID) and hydrocarbons investment (PIH) tax contributions within two years after the law enters into force;

        Mention is made of specific local content and corporate social responsibility but it is expected that the implementation regulations are likely to provide more precise obligations; and

        Companies performing hydrocarbons exploration and exploitation activities currently in Gabon must provide for and transfer site rehabilitation/decommissioning contributions to a Banque des États de l'Afrique Centrale, Bank of Central African Countries (BEAC) bank account or a BEAC monitored bank account in Gabon within one year of the new code entering into force.

        The new law does not grant the State rights to re-negotiate the terms of existing PSCs to reflect the new code upon events such as renewal. Nevertheless, the Direction Générale des Hydrocarbures (DGH) has confirmed that it was willing to approve a five year renewal of the Avouma Exclusive Exploitation Authorisation (EEA), subject to the Etame Production Sharing Contract (PSC) being amended to reflect the inclusion of the PID and PIH. Payments made under both the PID and PIH will finance the diversification of the local economy and further the development of the oil and gas industry respectively.

Other countries

        In a number of other countries, we are engaged in various activities that are regulated by local and international laws, regulations and treaties. In Malaysia, China and other countries, we operate plants and facilities for the storage, processing and transportation of chemical substances, including feedstock, products and waste. In the United Arab Emirates, Nigeria, Gabon and other countries, we are involved, or are in the process of being involved, in exploration, extraction, processing or storage and transportation activities in connection with feedstock, products and waste relating to natural oil and gas, petroleum and chemical substances. Our operations in the respective jurisdictions are subject to numerous laws and regulations relating to exploration and mining rights and the protection of safety, health and the environment.

4.C    Organisational Structure

        Sasol Limited (Sasol) is the ultimate parent of the Sasol group of companies.

        Sasol South Africa (Pty) Ltd, a wholly-owned subsidiary in the Sasol group and a company incorporated in the Republic of South Africa, primarily holds our operations located in South Africa. A number of other subsidiaries, including Sasol Oil (Pty) Ltd, Sasol Mining Holdings (Pty) Ltd, Sasol Gas Holdings (Pty) Ltd, Sasol Middle East and India (Pty) Ltd and Sasol Africa (Pty) Ltd, are incorporated in the Republic of South Africa and hold our interests in our group's operations in South Africa and our investments in Africa and the Middle East. Sasol Financing (Pty) Ltd, responsible for the management of cash resources and investments, and Sasol Technology (Pty) Ltd, responsible for engineering services, research, development and technology transfer, are also wholly owned and incorporated in the Republic of South Africa.

        Our wholly owned subsidiary, Sasol Investment Company (Pty) Ltd, a company incorporated in the Republic of South Africa, primarily holds our interests in companies incorporated outside South Africa, including Sasol European Holdings Limited (United Kingdom), Sasol Wax International AG (Germany), Sasol (USA) Corporation (United States), Sasol Holdings (Asia Pacific) (Pty) Ltd (South Africa), Sasol Chemical Holdings International (Pty) Ltd (South Africa), Sasol Canada Holdings Limited (Canada) and their subsidiaries.

        See Exhibit 8.1 for a comprehensive list of our significant subsidiaries and significantly jointly controlled entities.

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4.D    Property, plants and equipment

Plants and facilities

        We operate coal mines and a number of plants and facilities for the storage, manufacturing, processing and transportation of oil, chemicals and gas-related raw materials, products and wastes. For details on the use, capacity and products of these facilities for each business, including joint arrangements, refer to "Item 4.B—Business Overview".

Coal mining facilities

        Our main coal mining facilities are located at the Secunda Mining Complex, which consists of underground mines (Bosjesspruit, Brandspruit, Middelbult, Syferfontein, Thubelisha and Twistdraai) and Sigma: Mooikraal near Sasolburg.

        Pages M-1 to M-5 include maps showing the location of our coal properties and major manufacturing plants in South Africa.

Our Secunda facilities

        Our main manufacturing facilities are located at Secunda, the base for our Secunda Synfuels Operations, Secunda Chemicals Operations and a range of our chemical industries operations. The size of this property is approximately 82,5 square kilometres (km²) with operating plants accounting for 8,35 km².

Our Sasolburg facilities

        Our facilities at Sasolburg are the base for a number of our chemical industries operations. The size of these properties is approximately 51,4 km².

        The size of the Natref refinery, also based in Sasolburg, is approximately 2,0 km².

Our Mozambique facilities

        In Mozambique, our natural gas and condensate is produced from the Pande-Temane PPA asset operated by Sasol Petroleum Temane Limitada (SPT), a subsidiary within E&PI. Production from the Temane field is routed from three production wells via in-field flowlines and pipelines to the central processing facility (CPF) on a site of approximately 400 000 m² which is located some 700 km north of Maputo, the capital of Mozambique. Production from the Pande field is routed from 12 production wells via in-field flowlines, in-field pipelines, a trunkline and a slug catcher to the CPF.

        The current design capacity of the CPF is 456 mmscf/day of gas, together with small amounts of associated condensate. We are currently de-bottlenecking this facility to increase its capacity to 491 mmscf/day. The capacity of the plant will be further increased to 633 mmscf/day, as part of the plan to develop the PSA, which was submitted to the Mozambique authorities in February 2015. We are awaiting approval from the Mozambican government. Also as part of the PSA development project, a liquids processing facility (LPF) will be constructed adjacent to the CPF with a capacity of 15 000 bpd of oil and 20 000 tons per annum of LPG. The total cost of the expansion of the CPF is estimated to be R1,9 billion. The LPF is estimated to cost R5 billion, of which R17 million has been spent.

Our Canada facilities

        In Canada, natural gas and liquids are produced from the unconventional (shale/tight gas) Farrell Creek and Cypress A assets operated by Progress Energy Inc. Production is by means of production wells, flowlines, gathering lines and processing facilities located in British Columbia.

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        Farrell Creek gas is processed through facilities owned by Sasol and Progress Energy, covering a site of approximately 160 000 m².

        Cypress A gas is currently processed and sold through third party production facilities. Activities are underway to connect the Cypress A wells to the Farrell Creek facilities by means of an inter-field pipeline. The pipeline is expected to become operational in 2016.

Our Gabon facilities

        In Gabon, oil is produced from the Etame Marin Permit asset which is operated by VAALCO Gabon (Etame) Inc. The facilities are located some 35 km offshore southern Gabon and consist of fixed minimum facility wellhead platforms, subsea flowlines and a floating production, storage and off-loading vessel (FPSO).

        Production from the Etame, Avouma and Ebouri field occurs through a combination of subsea and platform wells which are tied back by pipelines and then routed to the FPSO contracted from and operated by Tinworth Limited. The processed oil is stored in tanks on the FPSO and is exported by shipping tanker according to a nominations and lifting schedule.

Our facilities in Germany

        Performance Chemicals operations are based at two locations in Germany, namely Brunsbüttel (site size approximately 2,0 million m²; plant size 500 000 m²) and Marl (site size approximately 160 000 m²; plant size 75 000 m²).

        Wax facilities are based in Hamburg (site size approximately 160 000 m²; plant size 100 000 m²).

Our facilities in Italy

        The operations of Performance Chemicals are based at three locations in Italy. The primary facilities are at Augusta (site size approximately 1,36 million m²; plant size 510 000 m²) and Terranova (site size approximately 330 000 m²; plant size 160 000 m²).

Our facilities in the United States

        Various Performance Chemicals operations are based at a number of locations in the US. The most significant of these facilities is located at Lake Charles, Louisiana (site size approximately 3 million m²; plant size 540 000 m²).

        Performance Chemicals also has phenolics operations based at Oil City, Pennsylvania and Houston and Winnie, Texas.

        A wax production facility is located in Richmond, California.

Our interests in facilities in Qatar

        ORYX GTL is a gas-to-liquids plant, located at Ras Laffan Industrial City, situated along the northeast coast of Qatar (site size approximately 8 km²).

Our catalyst manufacturing facilities in Sasolburg and The Netherlands

        Sasol Cobalt Catalyst Manufacturing (Pty) Ltd has the following catalyst manufacturing interests:

•

A wholly owned 680 tpa cobalt catalyst manufacturing unit, situated in Sasol's Sasolburg site, 80 km south of Johannesburg, South Africa; and

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•

A manufacturing agreement with BASF in De Meern, The Netherlands, which currently has two 680 tpa cobalt catalyst manufacturing units fully operational, dedicated exclusively to Sasol.

        These units are sufficient to supply cobalt catalyst to current committed ventures and as future GTL ventures are realised. Sasol plans to expand its cobalt catalyst capacity to ensure supply.

        For more information regarding capital expenditure in respect of these properties and the related facilities and operations, refer to "Item 5.F—Liquidity and capital resources" for a description of our material plans to construct, expand and enhance our facilities.

Processing operations

        Coal export business—Secunda operations.    We started the coal export business in August 1996. To date, we have exported a total of 57,69 Mt of beneficiated coal, and sold 2,3 Mt of beneficiated coal locally This was beneficiated from 147,49 Mt of run of mine coal (ROM) at the Twistdraai Export Plant between 1996 and 2015. Run of mine coal is sourced from the existing East shaft of Twistdraai Colliery (142,47 Mt) (formerly East, West and Central shafts) and the Thubelisha Shaft (5,02 Mt).

        The export beneficiation plant has a design throughput capacity of 10,5 Mt per annum. In 2015, we processed 7,5 Mt. The plant consists of a primary and secondary beneficiation stage. The primary stage is made up of three modules, each module divided into two identical feed streams. Coal is fed at a rate of 500 ton per hour, per module to a total of 18 primary cyclones. The secondary stage consists of two modules, each equipped with a 1 000 mm diameter dense medium cyclone.

        The run of mine (ROM) coal is transported via overland conveyor belts to the export beneficiation plant from the Twistdraai shafts. The export product is loaded onto trains by means of a rapid load-out system, and then transported to the Richards Bay Coal Terminal (RBCT) in KwaZulu-Natal.

        The capacity at the RBCT was increased from 76 Mt to 91 Mt per year, following the commissioning of the Phase V expansion in May 2010. Mining has a 4,23% share in the capacity of this terminal, which corresponds to the existing entitlement of 3,6 Mt per year. For the foreseeable future, we anticipate exports of approximately 3,25 Mt per year.

        Sasol Coal Supply—Secunda operations.    Sasol Coal Supply operates the coal handling facility between Mining and Secunda Synfuels Operations by stacking and blending coal on six live stockpiles. The overland conveyors from the mining operations to the coal handling facility are, in total, 35 km long and also form part of the Sasol Coal Supply operation.

        The operation has a live stockpile capacity of 660 000 tons, which is turned over around 1,2 times per week. In addition, there is a strategic stockpile capacity of more than 2,0 Mt. The objectives of this facility are:

•

to homogenise the coal quality supplied to Secunda Synfuels operations;



•

to keep mine bunkers empty;



•

to keep the Secunda Synfuels Operations bunkers full with a product that conforms to customer requirements;



•

to maintain a buffer stockpile to ensure even supply; and



•

to prevent fine coal generation.

        The daily coal supply to Secunda Synfuels Operations is approximately 112 000 tons.

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Coal exploration techniques

        Mining's geology department employs several exploration techniques in assessing the geological risks associated with the exploitation of the coal deposits. These techniques are applied in a mutually supportive way to achieve an optimal geological model of the relevant coal seams, targeted for production purposes. The Highveld Basin is considered to be structurally complex when compared to the other coalfields in South Africa where mining activities take place. As a result, Mining bases its geological modelling on sufficient and varied geological information. This approach is utilised in order to achieve a high level of confidence and support to the production environment.

        Core recovery exploration drilling.    This is the primary exploration technique that is applied in all exploration areas, especially during reconnaissance phases. In and around operational mines, the average vertical borehole density varies from 1:10 to 1:15 (boreholes per hectare), while in medium-term mining areas, the average borehole density is in the order of 1:25. Depths of the boreholes drilled vary, depending on the depth to the Pre-Karoo basement, from 160 m to 380 m. The major application of this technique is to locate the coal horizons, to determine coal quality and to gather structural information about dolerite dykes and sills, and the associated de-volatilisation and displacement of coal reserves. This information is used to compile geological models and forms the basis of geological interpretation.

        Directional drilling.    Directional drilling from surface to in-seam has been successfully applied for several years. A circular area with a radius of approximately 1,4 km of coal deposit can be covered by this method, from one drill site. The main objective of this approach is to locate dolerite dykes and transgressive dolerite sills, as well as faults with displacements larger than the coal seam thickness.

        Horizontal drilling.    This technique is applied to all operational underground mines and supplies short-term (minimum three months) exploration coverage per mining section. No core is usually recovered, although core recovery is possible, if required. The main objective is to locate dolerite dykes and transgressive sills intersecting the coal mining horizon, by drilling horizontal holes in the coal seam from a mined out area. A drilling reach of up to 1 km is possible, although the average length is usually 800 m in undisturbed coal.

        Aeromagnetic surveys.    Many explorations were usually aero-magnetically surveyed before the focused exploration was initiated. The main objective is to locate magnetic dolerite sills and dykes, as well as large-scale fault zones.

        Airborne electro-magnetic surveys.    Due to the occurrences of non-magnetic dolerite dykes and sills, it has been necessary to survey certain exploration areas electro-magnetically to pinpoint these structures to optimise mine deployment.

        Geophysical wireline surveys of directional boreholes.    Geophysical surveys are routinely conducted in the completed directional drilled boreholes. This results in the availability of detailed information leading to increased confidence of the surface directional drilling results. This technique has also been applied with excellent results in underground directional drilling.

Secunda operations

        The coal supplied to Secunda Synfuels Operations is the raw coal mined from the four mines supplying Secunda Synfuels operations exclusively and the secondary product from the export mine's beneficiation plant.

        We have carried out extensive geological exploration in the coal resource areas, and undertake additional exploration to update and refine the geological models. This allows for accurate forecasting of geological conditions and coal qualities, and so effective planning and utilisation of coal reserves.

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Computation and storage of geological information

        We store geological information in the Acquire database. We conduct regular data validation and quality checking through several in-house methods. Data modelling is conducted by manual interpretation and computer-derived geological models, using the Minex 6 edition of the GEOVIA/ MINEX software. Reserves and composite qualities are computed using established and recognised geo-statistical techniques.

General stratigraphy

        The principal coal horizon, the Number 4 Lower Coal Seam, provides some 89,66% (2014—89,97%) of the total proved and probable reserves. The Number 4 Lower Coal Seam is one of six coal horizons occurring in the Vryheid Formation of the Karoo Supergroup, a permo-carboniferous aged, primarily sedimentary sequence. The coal seams are numbered from the oldest to the youngest.

        The Number 4 Lower Coal Seam is a bituminous hard coal, characterised by the following borehole statistics:

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The depth to the base of the seam ranges from 40m to 241m with an average depth of 135m below the surface topography. All the current mining done on this seam is underground;



•

The floor of the seam dips gently from north to south at approximately 0,5 degrees;



•

The thickness of the seam varies in a range up to 10m with a weighted average thickness of 3,3m. In general, thinner coal is found to the south and thicker coal to the west adjacent to the Pre-Karoo basement highs;



•

The inherent ash content (air dried basis) is an average 28,6%, which is in line with the coal qualities supplied during the past 30 years to Secunda Synfuels operations;



•

The volatile matter content is tightly clustered around a mean of 19,5% (air dried); and



•

The total sulphur content (air dried), which primarily consists of mineral sulphur in the form of pyrite and minor amounts of organic sulphur, averages 0,92% of the total mass of the coal.

        The other potential coal seam is:

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The Number 2 Coal Seam at Middelbult mine and the Impumelelo colliery have been included in our reserve base.

Mining parameters and assumptions used during reserve estimation

•

Minimum mining height (meters):  the minimum mining height used is 1,8m.



•

Maximum mining height (meters):  the maximum mining height used is 4,8m for the Twistdraai colliery Thubelisha shaft.



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Primary safety factor⁽¹⁾:  the safety factor used in the mine planning, for primary development, in normal ground conditions is 1,8.



•

Secondary safety factor⁽¹⁾:  the safety factor used in the mine planning, for secondary development, in normal ground conditions is 1,6.

   

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(1)

The safety factor is calculated by dividing the strength of the pillar by the stress acting on the pillar. The strength of the pillar is determined by the inherent strength of the coal material, the width of the pillar and the height of the pillar. The stress on the pillar is the result of the pillar load, which is determined by the depth of mining, the pillar width and the board width.

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•

Minimum dry ash free volatile matter content:  the dry ash free volatile matter content gives an indication of devolatilised coal. During estimations, areas with a dry, ash free volatile matter content of less than 28% are excluded, and considered to be devolatilised coal areas.



•

Geological loss factor:  the geological loss factors vary in the respective blocks from 5,0% (Twistdraai and Brandspruit) to 27,0% (Block 2 South) and averages 11,01% in the operational mines. The geological loss factor is a discount factor applied to the gross in situ tonnage to take into account as yet unobserved geological features, which may occur. The geological loss factor is therefore a function of the borehole density and known geological complexity of the area, as well as the judgement of the competent person involved.



•

Mine layout losses:  the mine layout loss factors, expressed as a percentage of the in situ coal reserves used varies between 12,6% for Twistdraai colliery and Middelbult Number 2 Coal Seam and 38,9% for Bosjesspruit. The mine layout loss factor is a discount factor required to account for the expected loss of coal reserves, due to actual mining activities, not reaching the defined boundary of the mineable in situ coal reserve block. The mine layout loss factors applied are therefore a function of the complexity of the depicted actual and anticipated geological structures and the actual historical loss factors experienced.



•

Mine method losses:  this is the coal left behind in the roof due to not mining the full seam. The reason for this being safety, leaving a protective layer of coal in the roof of the coal seam. Losses reported are 18,3% (2014—23,9%) for Syferfontein, and 11,2% (2014—11,2%) for Sigma Mooikraal.



•

Mining losses:  mining loss factor, expressed as a percentage of the mineable in situ coal reserve, vary between 32,3% for Twistdraai colliery Thubelisha shaft and 63,7% for the Number 2 Seam at Impumelelo. The mining loss factor is the discount factor required to account for the expected loss of coal reserves, due to actual mining activities, which requires support pillars to be left in situ. The mining loss factors applied are therefore a function of the mining method used and planned to be used, as well as the actual historical loss factors experienced.



•

Contamination factor:  the contamination factor, expressed as a percentage of the extractable coal reserve, varies between 0,6% (2014—0,5%) for Syferfontein and 3,9% for Impumelelo and the average is 3,1%. The contamination factor refers to the extraneous coal and non-coal material which is unintentionally added to the practical mining horizon, as a result of the mining operations. The contamination factors applied are therefore a function of expected geological conditions in the immediate roof and floor of the mining horizon, as well as the actual and historical contamination factors experienced. Contamination factors are also influenced by the equipment selection relative to the planned mining height.



•

Superficial moisture factor:  the superficial moisture factor, expressed as a percentage of the extractable coal reserve, varies between 3,6% for Twistdraai colliery and 6,8% for the coal seam 2 (C2) at Middelbult. The superficial moisture refers to the extraneous moisture added to the extracted coal as a result of the mining operations. The factors applied are therefore based mostly on the historical factors experienced.

Reserve estimation (remaining reserves at 31 March 2015)

        We have approximately 3,7 billion tons (Bt) (2014—3,7 Bt) of gross in situ proved and probable coal reserves in the Secunda Deposit and approximately 1,2 Bt (2014—1,3 Bt) of recoverable reserves. The coal reserve estimations are set out in table 1 below. Reported reserves will be converted into synthetic oil reserves, except for reserves which will be used for utilities in Secunda Synfuels Operations and the majority of the Twistdraai Thubelisha shaft reserves which will be exported. The reserve disclosure in this section includes Mining's total coal resources and reserves available for mining

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operations. These reserves have not been adjusted for the synthetic oil reserves reported in the supplemental oil and gas information. The different reserve areas are depicted on maps on pages M-4 and M-5, as well as whether a specific reserve area has been assigned to a specific mine.

Table 1.

Coal reserve estimations⁽¹⁾ as at 31 March 2015, in the Secunda area where we have converted mining rights (signed on 29 March 2010) in terms of the Mineral and Petroleum Resources Development Act, Act 28 of 2002

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Table 2.

        Coal qualities, on an air dry basis, in respective coal reserve areas, where Mining has converted mining rights in respect of the Secunda mining complex in terms of the Mineral and Petroleum Resources Development Act, Act 28 of 2002.

Table 3.

        Coal qualities, on an as received basis, in respective coal reserve areas, where Mining has converted mining rights in the Secunda mining complex in terms of the Mineral and Petroleum Resources Development Act, Act 28 of 2002.

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Criteria for proved and probable

        Over and above the definitions for coal reserves, probable coal reserves and proved coal reserves, set forth in Industry Guide 7, promulgated by the US Securities and Exchange Commission, which are included in our glossary. We consider the following criteria to be pertinent to the classification of the reserves.

        Probable reserves are those reserve areas where the drill hole spacing is sufficiently close in the context of the deposit under consideration, where conceptual mine design can be applied, and for which all the legal and environmental aspects have been considered. Probable reserves can be estimated with a lower level of confidence than proved coal reserves. Currently this classification results in variable drill spacing depending on the complexity of the area being considered and is generally less than 500m, although in some areas it may extend to 880m. The influence of increased drilling in these areas should not materially change the underlying geostatistics of the area on the critical parameters such as seam floor, seam thickness, ash and volatile content.

        Proved reserves are those reserves for which the drill hole spacing is generally less than 350m, for which a complete mine design has been applied which includes layouts and schedules resulting in a full financial estimation of the reserve. This classification has been applied to areas in the production stage or for which a detailed feasibility study has been completed.

Legal rights on coalfields

        Since the enactment of the Mineral and Petroleum Resources Development Act, 28 of 2002 (MPRDA) in May 2004, our subsidiary Sasol Mining (Pty) Ltd, has been successful in converting its prospecting permits and mining authorisations to new order prospecting and mining rights in terms of provisions of the MPRDA. In respect of the Secunda Complex, the new order mining rights, known as converted mining rights, became effective on 29 March 2011. The Secunda Complex mining rights, in extent of approximately 168 439ha, have been granted for a period of ten years and comprise the total reserve area shown in table 1 and on page M-5. Please also refer to "Item 4.B Business Overview—Regulation of mining activities in South Africa". We submitted an application to extend the validity of the Secunda Complex mining rights to 30 years—the maximum allowable period under the MPRDA—to the regulator. We were granted approval in February 2014. The amendment to the Secunda Complex mining right has still to be notarially executed. In respect of the Mooikraal Operation in the Free State, the relevant old order mining right was also converted and signed on 29 March 2010 and a mining right in respect of small reserve blocks situated within or adjacent to the Sigma: Mooikraal operation was signed on 30 March 2010. The mining rights, approximately 6 647 ha, have been granted for a period of 30 years. We submitted an application to consolidate the two mining rights held over the Sigma: Mooikraal operation and we are awaiting approval from the regulator. The validity period of our mining rights may, on application, be renewed for further periods not exceeding 30 years each.

Synthetic oil

        Refer to "Item 4. D Property, plants and equipment—Mining properties and operations" for details regarding our mining properties, coal exploration techniques and the mining parameters and assumptions used during the estimation of synthetic oil reserves.

Natural Oil and Gas

Development and Production Assets

        We currently hold equity in three assets with proved reserves in Mozambique, Gabon and Canada. We also have equity in non-producing assets and exploration licences in Mozambique, Nigeria, Australia and South Africa.

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Mozambique

        In Mozambique, we have interests in two onshore assets, one is a producing asset with proved reserves and the other is being considered for development.

        The onshore producing asset is the Pande-Temane Petroleum Production Agreement (PPA) licence (302,2 thousand developed net acres). Our subsidiary Sasol Petroleum Temane Limitada, the operator, holds a 70% working interest in the asset under the terms and conditions of the Pande-Temane PPA. The PPA expires in 2034, and carries two possible five year extensions. There is no requirement to relinquish any acreage until the expiry of the PPA.

        The onshore asset that is being considered for development is the Pande-Temane Production Sharing Agreement (PSA) licence. Our subsidiary Sasol Petroleum Mozambique Limitada, the operator, holds a 100% interest in the asset with Empresa National de Hydrocarbonetos de Moçambique (ENH), the national oil company of Mozambique, being entitled under the terms of the Pande-Temane Production Sharing Agreement to a calculated share in any production. Two development and production areas for certain reservoirs have been approved by the government (283,2 thousand undeveloped net acres) and a five-year commercial assessment period was approved for the remaining reservoirs (159,6 thousand undeveloped net acres). A field development plan in respect of the Development and Production Areas (DPA) was submitted in February 2015 and is presently under consideration by the authorities. An appraisal programme to further delineate the remaining reservoirs is currently in the planning stage. Retention of the latter reservoirs is contingent on declaration of commerciality and government approval of an additional field development plan.

Exploration assets

        We also have interests in two exploration licences, one offshore and the other onshore. Both are operated by a Sasol subsidiary. The offshore exploration area comprises the shallow water parts of the Exploration and Production Concession Blocks 16 & 19. Our subsidiary Sasol Petroleum Mozambique Exploration Limitada, the operator, holds a 50% working interest which will increase to 85%, when the assignment of our partner's interest is concluded (622,7 thousand undeveloped net acres). ENH has a 15% interest that is carried until field development. Petroleum operations in the licence were suspended in 2008 and will remain so until the Strategic Environmental Assessment (SEA), which was commissioned by the Mozambique government, is made public. We have retained our interest in the licence with a view to defining a future work programme when the outcome of the SEA is known.

        The onshore exploration area is the Exploration and Production Concession (EPC) Area A. Our subsidiary Sasol Petroleum Mozambique Exploration Limitada, the operator, holds a 90% working interest in the licence (1 490,0 thousand undeveloped net acres). ENH has a 10% interest that is carried until field development. In April 2015 we executed a farm-down that will reduce our working interest to 50%, when the government approves the farm-down transaction. The Area A licence is in the second 2-year exploration period which includes one commitment well and was due to expire in May 2016. In June 2015 we obtained approval for a 1 year extension which will allow us to drill the commitment well in mid calendar year 2016 and evaluate the results before the end of the period.

        Our interest in the offshore Exploration and Production Concession Sofala (1 208,1 thousand undeveloped net acres) was relinquished in January 2015, without drilling, upon payment of the minimum expenditure commitment.

Canada

        In Canada, we have a 50% economic interest in the unconventional (shale/tight gas) Farrell Creek and Cypress A asset located in British Columbia. We acquired our interest in the asset from Talisman Energy Inc. in two transactions, with licence participation commencing on 1 January 2011. On

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12 March 2014, a transaction between Talisman and Progress Energy closed, resulting in Progress Energy acquiring Talisman's interest and taking over as operator. At 30 June 2015, Farrell Creek comprised 30 licences and leases and Cypress A comprised 27 licences and leases. Acreage retention and the conversion of licences (which carry no production rights) to leases (with production rights) is enabled by drilling commitments, the provincial government's prescribed lease selection and validation process and license extension applications. The decision to retain acreage and convert licences to leases is dependent on the drilling results and ongoing study work. Drilling and retention activities have been and will be included in the applicable work programmes so that licences and leases for the Montney, due to expire before 30 December 2016, are retained (covering 16 licences and leases in Farrell Creek and Cypress A, jointly comprising 11 177 undeveloped net acres).

Gabon

        In Gabon, we hold a 27,75% working interest in the areas covered by Exclusive Exploitation Authorisations (EEA) under the terms of the Etame Marin Permit Exploration and Production Sharing Contract (PSC).

        The exploitation areas of the Etame Marin Permit (7 975 developed net acres) are covered by three 10-year EEAs, each with two 5-year renewal periods available on request and subject to government decree. The detailed final terms for the renewal of the Avouma EEA for the first 5-year renewal period to March 2020 are currently being concluded with the government. The Etame EEA is currently in the first 5-year renewal period and an application for the second 5-year renewal period will be submitted prior to expiry in July 2016. The Ebouri EEA is currently in the initial 10-year period and an application for the first 5-year renewal period will be submitted prior to expiry in June 2016.

        The current plan of development assumes the various renewals will be granted as required on a similar basis as in the past. In summary:

•

Etame EEA: 3 387 developed net acres, 2001-2016 + 5 year extension (to July 2021)



•

Avouma EEA: 3 566 developed net acres, 2005-2015 + two 5 year extensions (to March 2025)



•

Ebouri EEA: 1 022 developed net acres, 2006-2016 + two 5 year extensions (to June 2026)

        The sixth term of the exploration permit in the Etame Marin Permit expired in July 2014 (219,3 thousand undeveloped net acres). The PSC does not provide for a seventh term, however discussions are being held with the government about a possible further term under a new PSC.

Other Areas

        Australia—we have interests in one offshore exploration licence and three onshore exploration licences. Offshore in the Northwest Shelf of Australia our subsidiary Sasol Petroleum Australia Limited holds a 30% working interest in the Permit AC/P 52 (160,8 thousand undeveloped net acres). The licence is operated by Shell Development Australia (Pty) Ltd. As a result of uncertainty on the licence boundary, the commitment to drill one well before May 2015 is currently suspended and the licence has been extended for two years until May 2017.

        Onshore in the Beetaloo Basin of Australia's Northern Territory our subsidiary Sasol Petroleum Australia Limited holds a 35% working interest in the Exploration Permits EP76, EP98 and EP117 (1 612,7 thousand undeveloped net acres) which are operated by Origin Energy Resources Limited. Our farm-in to these licences was concluded in August 2014 and in return we pay 50% of the initial licence period work programme costs, carrying Falcon Oil & Gas Limited. The initial licence period expires in December 2016 and includes five commitment exploration wells. Plans are in place to drill the first three wells during 2016.

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        Botswana—in December 2014 the relinquishment of the Prospecting Licences PL134/2010, PL135/2010 and PL136/2010 was accepted by the government of Botswana (367,9 thousand undeveloped net acres). We no longer have any interests in Botswana.

        Nigeria—in August 2014 Oil Prospecting Licence 214, in which we have a 5% working interest and which is operated by Esso, was converted to an Oil Mining Licence (OML 145) and 50% of the block relinquished.

        In September 2014 we notified our partners of our intention to withdraw from OML 140 (15,1 thousand undeveloped net acres) and OML 145 (16,9 thousand undeveloped net acres). The Deeds of Assignment for OML 140 were signed by all partners and received government approval on 5 May 2015. Partner and government approval for assignment of OML 145 was outstanding at 30 June 2015.

        Papua New Guinea—in August 2014 the government of Papua New Guinea approved the transfer of operatorship and the sale of our interests in the exploration licences PPL-426 and PPL-287 (1 627,7 thousand undeveloped net acres) to Talisman Energy Inc. We no longer have any interests in Papua New Guinea.

        South Africa—following the farm-down of our equity to Eni South Africa BV which was effected in December 2014, our subsidiary Sasol Petroleum International (Pty) Ltd holds a 60% working interest in the Exploration Right ER236 licence (12 169,7 thousand undeveloped net acres), which is operated by Eni, offshore in the Durban Basin of South Africa. The initial three year exploration period runs to November 2016 and carries a commitment to acquire 5 950km of 2D reconnaissance seismic data which was fulfilled early in 2015. In May 2014 an application for an Exploration Right over the 3A/4A area (2 644,0 thousand undeveloped net acres), which was previously covered by a Technical Co-operation Permit, was submitted to the government. Approval was received on 2 July 2015. Our subsidiary SPI and the Petroleum Oil & Gas Corporation of South Africa each hold a 50% working interest.

Productive Wells and Acreage

        The table below provides details of the productive oil and gas wells and the amount of developed and undeveloped acreage at 30 June 2015.

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Drilling and Other Exploratory and Development Activities

Exploratory and Development Wells

        The table below provides the number of net natural oil and gas exploratory wells and development wells completed in each of the last three years.

Other drilling activities

        The table below provides the number of net wells that are not exploratory wells or development wells, drilled in each of the last three years.

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Wells in the process of being drilled

        The table below provides the gross number of natural oil and gas wells being drilled and the number of oil and gas wells suspended during the drilling process at 30 June 2015.

Exploratory and development activities

Natural Oil and Gas

        In the following narrative sections, unless stated otherwise, all quantitative references are to gross figures.

Mozambique

2013

        In the Pande-Temane PPA licence, a development project commenced for the procurement and installation of low pressure compressors to meet delivery requirements of current gas sales agreements.

        In the Pande-Temane Production Sharing Agreement (PSA) licence, an appraisal report was submitted to the petroleum regulator in Mozambique, a notice of commercial discovery was issued and two development and production areas were declared and approved.

        The Mupeji-1 exploration well in the offshore M-10 concession was plugged and abandoned as a dry hole and the licence was relinquished. The Njika discovery and deepwater parts of the offshore Blocks 16 & 19 were relinquished but the shallow water area was retained. The 2D seismic data acquisition in onshore Area A continued throughout 2013. The second Exploration Period commitment was fulfilled for the Sofala licence and we entered the Third Exploration Period with a one well commitment.

2014

        In the Pande-Temane PPA asset, two production wells were brought back on stream in October after being shut-in since 2012. In November and December 2013 produced condensate was re-injected because road transportation was disrupted by political and civil disturbances.

        In the Pande-Temane PSA asset, work on the development project progressed.

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        In Area A, we entered the second Exploration Period, which carries a drilling commitment of one well by mid-2016, subsequently extended to mid 2017, together with a 20% relinquishment.

2015

        In the Pande-Temane PPA asset, phase 1 of the low pressure compression project neared completion. At year-end minor activities remained to be completed and start of operation is expected early in 2016. A project to de-bottleneck the plant to increase capacity to 491 MMscf/day was initiated. An additional 2 PJ/a gas contract was agreed with ENH.

        On 25 February 2015, we submitted plans for the development of the Temane and Inhassoro development and production areas of the Pande-Temane PSA licence to the government for approval. In parallel the PPA licensees also submitted plans to expand the Central Processing Facility (CPF) in order to provide additional capacity to process PSA gas. Early works for the PSA project began in March 2015.

        Phase 1 of the development of the Nhamacunda housing village was completed on 22 June 2015. This project aims to provide affordable housing for our employees as part of our localisation strategy. Phase 1 includes 25 houses, potable water supply, electricity supply and natural gas reticulation, a maintenance building, a standby diesel generator and a wastewater treatment plant with effluent disinfection. The project is scheduled for completion in May 2016.

        As another part of our corporate social responsibility initiatives we, along with our partners, recently handed over the Benzane health centre to government authorities. The centre is aimed at improving access to healthcare through infrastructure development in the country. In partnership with the Ministry of Health, Sasol supported the construction and equipping of the centre, which also has two houses for medical personnel.

        In Area A, well planning activities have been undertaken in order to drill the commitment exploration well in mid calendar year 2016.

Canada

2013

        In Farrell Creek, a total of 29 development wells were drilled, while 13 wells were completed. One stratigraphic test well was drilled in Cypress A.

2014

        Development drilling activities continued in Farrell Creek, with 25 wells drilled during the year. A total of 33 wells were completed during the year. In Cypress A, four vertical wells were drilled.

2015

        Development drilling activities continued in Farrell Creek, where 10 wells were drilled and 24 were completed. Development activity increased in Cypress A during 2015 with 5 wells drilled of which 3 were completed. In total, 11 wells were awaiting completion at 30 June 2015 (7 in Farrell Creek and 4 in Cypress A).

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Gabon

2013

        One horizontal development well was drilled in the Avouma field which proved up an eastern area of the field and was immediately brought into production. An exploration well was drilled and classified as a dry hole and reprocessing of 3D seismic data was completed.

        The combined Etame Expansion and South East Etame & North Tchibala project was sanctioned by partners and a field development plan was submitted to and approved by the Gabon authorities.

        A study had commenced to examine the origin and characteristics of the H₂S encountered in the Ebouri field. The two affected wells remain shut-in until a viable crude sweetening processing facility has been installed.

2014

        The exploration commitment well was drilled but no significant quantities of hydrocarbons were found and the well was plugged and abandoned. A horizontal replacement sidetrack to the original ETBSM-1H well was successfully drilled and completed, and brought on production.

        H₂S concentrations in excess of 50 parts per million were detected in the northwest segment of the Etame field. The affected well was shut-in pending further investigation into the provenance of the H₂S and its potential movement to other areas of the field.

2015

        Significant progress was made with the execution of the Etame Expansion Project (EEP) and South East Etame and North Tchibala (SEENT) development projects. Transport and installation of the two new platforms was completed in September and October 2014. The first production well (ET-8H) on the new EEP platform was spud in October 2014 and first oil achieved in December 2014. However, following detection of H₂S at a concentration of 1 100 ppm, production from the well was suspended. Elevated H₂S was confirmed in further testing of the well in March 2015. The well currently remains shut-in. A further two production wells (ET-10H and ET-12H) on the EEP platform were drilled and completed and successfully brought into production in February and April 2015. The drilling rig then moved to the SEENT platform from which two wells (ETSEM-2H and ETBNM-1H) were currently in progress at year end.

        Select Phase studies for the Crude Sweetening Project (CSP), which were initiated in 2013, were suspended in January 2015 following the collapse in the oil price. The project is now being re-scoped by the partnership to determine more cost effective solutions for a crude sweetening processing facility to reinstate production from those areas impacted by H₂S souring of the oil.

        The draft report of an industry-wide audit performed by Alex Stewart International, on behalf of the Gabon government, was issued to the Operator (VAALCO Gabon (Etame) Inc.) for comment in October 2014. The operator's response to the draft audit report was submitted to government for consideration in February 2015. Subsequent discussions with government took place during the year with several major findings being successfully concluded. Final notification from the government on the audit settlement is pending. Additional living quarters were added to the Floating Production Storage and Off-loading vessel (FPSO) in preparation for class certification activities which are due to commence in 2017.

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Other Areas

2013

        Australia—activities in AC/P 52 were limited to the joint farm-down by Sasol and Finder Exploration (Pty) Ltd to Shell Development Australia (Pty) Ltd.

        Nigeria—in the OML 140 licence, front-end engineering design work continued on the Bonga South West Aparo field development project, following approval of the full-field development plan. Exploration activity by the operator Star Ultra Deep Petroleum Limited (Chevron) in OML 140 comprised studies on several prospects in the permit. In the Nigeria OPL 214 licence, operator Esso Exploration and Production Nigeria (Deepwater West) Limited evaluated concepts to develop the Uge field, including a study with Chevron for Nsiko joint development.

        South Africa—approval of the relinquishment of exploration rights for Block 3A/4A was received. Former operator BHP Billiton Petroleum Ltd withdrew and we, with The Petroleum Oil and Gas Corporation of South Africa Limited, were awarded the area as a Technical Co-operation Permit for a one year study. In ER236, seismic data was acquired within the permit area.

2014

        Nigeria—in the OML 140 concession, the operator Chevron, continued with studies for the Nsiko discovery and considered development options for the field. Approval was received from the Department of Petroleum Resources in April 2014 for the Bonga South West and Aparo (BSWAp) front-end engineering and design work. The Pre-Unitisation Agreement and Contractors' Pre-Unitisation Operating Agreement were signed. A draft version of the Unitisation Agreement was submitted to the Nigerian National Petroleum Corporation. In Nigeria OPL 214, the operator Esso, continued with the evaluation of development concept options for the Uge discovery. The operator applied for conversion of OPL 214 to an Oil Mining Licence (OML 145) which was granted by the Minister of Petroleum Resources subject to payment of the signature bonus.

        South Africa—on Technical Cooperation Point (TCP) 3A/4A, technical studies based on existing data were completed and an application submitted to convert the TCP to an exploration permit. In the ER236 licence further seismic data was acquired to complete the Initial Period seismic commitment.

2015

        Australia—in the Beetaloo Basin, the rig was mobilised to the location in preparation to drill the first commitment well in licence EP98 early in 2016. A further two wells in the five-well primary term commitment are scheduled to be drilled by the end of 2016.

        Nigeria—OPL 214 was converted to OML 145 subsequent to payment of the signature bonus on 28 August 2014. In the Nsiko North prospect on Nigeria OML 140, the Nsiko North-01 deepwater exploration well was spudded in September 2014. Hydrocarbons were successfully discovered in the secondary target reservoirs. Due to mechanical issues with the drilling, the primary reservoir targets were not intersected and a decision was taken by the operator to plug and abandon the well in January 2015. The BSWAp front-end engineering and design work continued, including the negotiations for the Pre-Unitisation agreement, up until Ministerial approval of our withdrawal from OML 140.

        South Africa—in the ER236 licence, technical evaluation of the seismic data acquired in 2013 and 2014 and of the prospectivity continued in 2015.

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Table of Contents

Capitalised Exploratory Well Costs

        The table below summarises the capitalised exploratory well costs, providing the amount of costs that are capitalised pending the determination of proved reserves at the end of the year.