Sasol (Johannesburg) said today that its joint CEOs, Bongani Nqwababa and Stephen Cornell, will step down following a review of its Lake Charles chemicals project (LCCP), which has been hit by delays and cost escalation. Sasol noted that the CEOs have not been found to have committed misconduct nor incompetence but would step down at the end of the month to restore trust in the company. Nqwababa and Cornell, who had taken up their positions in July 2016, have agreed to an “amicable mutual separation,” the company says.
“It is a matter of profound regret for the board that shortcomings in the execution of the LCCP have negatively impacted our overall reputation, led to a serious erosion of confidence in the leadership of the company and weakened the company financially,” Sasol said in a statement. Fleetwood Grobler, executive vice president/chemicals, will assume the role of president and CEO on 1 November.
A review carried out into the Lake Charles project showed that the management team acted inappropriately, lacked experience and were overly focused on maintaining cost and schedule estimates instead of providing accurate information. A senior executive previously in charge of the project is facing disciplinary action and three executives involved in the Lake Charles project have left the company.
LCCP, approved in 2014, exceeded its “worst-case scenario” for cost over the last few years as problems continued to escalate. Sasol has twice delayed its financial results for the year to end-June to probe cost overruns at the project. EBITDA fell 45% to R 9.7 billion ($661.5 million) due to lower chemical prices and LCCP costs. The company said today that it is confident the project will cost $12.6–12.9 billion, in line with its September guidance. It was initially expected to cost $8.9 billion.
By Natasha Alperowicz
Source: Chemical Week
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