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Sasol Limited - Sasol And Petroliam Nasional Berhad Agree Principles Regarding A

Release Date: 19/02/2004 14:30:01      Code(s): SOL
Sasol Limited - Sasol and Petroliam Nasional Berhad agree principles regarding a
                merger of equals between Sasol"s Liquid Fuels Business and      
               Engen                                                            
Limited ("Engen") to create a leading South African liquid      
               fuels                                                            
                business                                                        
Sasol Limited                                                                   
(Incorporated in the Republic of South Africa)                                  
(Registration number 1979/003231/06)                                            
(ISIN: ZAE000006896)                                                            
Share codes:   JSE -  SOL                                                       
NYSE - SSL                                                       
("Sasol")                                                                       
Sasol and Petroliam Nasional Berhad ("Petronas") agree principles regarding a   
merger of equals between Sasol"s Liquid Fuels Business and Engen Limited        
("Engen") to create a leading South African liquid fuels business               
1.   Introduction                                                               
On Friday 6 February 2004, Sasol announced that Sasol and Petronas, ("the       
Partners") were in discussions concerning the merger of their respective        
interests in Sasol"s Liquid Fuels Business and Engen in a joint venture to      
create a leading South African liquid fuels business.  They have now agreed the 
principles of this merger of equals.  Together with their Black Economic        
Empowerment ("BEE") partners, the former Exel shareholders and Worldwide African
Investment Holdings ("WAIH"), and other interested parties, they aim to reach   
definitive agreements within the next few months.  It is envisaged that the     
merger will be effected by way of a joint venture in which the Partners will    
each have an equal 37,5 per cent. interest and in which BEE partners (both      
existing and new) will hold a combined 25 per cent. interest.                   
2.   Scope of the joint venture                                                 
The envisaged combination of Engen and Sasol"s Liquid Fuels Business will create
a leading South African liquid fuels business, which will comprise Sasol"s, and 
Engen"s liquid fuels marketing and distribution businesses in the retail,       
commercial and wholesale markets.  Sasol"s Liquid Fuels Business, which will be 
contributed to the joint venture, includes volumes produced at Secunda.  The    
joint venture will also include the Enref refinery at Durban, Sasol"s interest  
in the Natref refinery at Sasolburg and approximately 1500 service stations in  
South Africa.  The joint venture will have operations in 14 countries and its   
geographic scope will include the whole of sub-Saharan Africa.                  
The Board and Management of the joint venture will operate at arm"s length from 
the shareholders in the joint venture.                                          
3.   Background to and reasons for the merger                                   
The Partners believe that the strategic, commercial and financial logic for     
combining Sasol"s Liquid Fuels Business and Engen is compelling.  In particular 
they believe that:                                                              
the merger will create a business with substantial scale in the manufacturing of
liquid fuels in South Africa, with a petrol, kerosene and diesel refining       
capacity of approximately 14 billion litres per annum;                          
- the joint venture will be the leading liquid fuels retail marketing business  
in South Africa, with a presence in all provinces.  It will have a network,     
which includes over 1250 Engen service stations, as well as Sasol, Exel and     
Zenex service stations.  Many of these service stations have Quickshop or Sasol 
Delight convenience shops attached to them.  The joint venture will benefit from
Engen, South Africa"s leading fuel retail brand, and will leverage Sasol"s      
strong brand through accelerating the rollout of a network of premium Sasol     
branded Retail Convenience Centres in metropolitan areas;                       
- the joint venture will hold attractive market positions in a number of other  
countries in sub-Saharan Africa;                                                
- the joint venture will have a more optimal balance between refining and       
marketing operations than Sasol"s Liquid Fuels Business or Engen alone; and     
- the joint venture will create an attractive vehicle for sustainable BEE       
participation in the liquid fuels industry and should significantly advance the 
public interest, as set out below under BEE.                                    
4.   BEE and Public Interest                                                    
The Partners believe that the envisaged joint venture provides the opportunity  
for a sustainable and rewarding BEE participation in the most significant BEE   
investment in the South African liquid fuels industry to date.  WAIH, which     
currently owns 20 per cent of Engen, and the former Exel shareholders, who have 
the right to a shareholding in Sasol"s Liquid Fuels Business, support the       
transaction in principle and intend to become shareholders in the joint venture 
at its inception.  Discussions with other potential BEE shareholders are in     
progress.                                                                       
The Partners will ensure that the joint venture is established with regard to   
the public interest and the principles of good corporate citizenship.  The      
Partners strongly support the BEE policies of the Government as encapsulated in 
the Liquid Fuels Charter.  The joint venture is committed to furtherance of the 
principles of the Liquid Fuels Charter.  The Partners intend that the joint     
venture will assist in the development of Historically Disadvantaged South      
Africans and give effect to the joint venture"s commitment to a positive socio- 
economic agenda within the wider community.  It is anticipated that WAIH and the
former Exel shareholders will help promote the joint venture"s range of BEE     
initiatives and the achievement of the Liquid Fuels Charter objectives.         
5.   Timetable and further announcements                                        
The Partners plan to reach definitive agreements concerning the merger during   
the third quarter of 2004.  A further announcement will be made at the          
conclusion of this process.  Definitive agreements will be subject to regulatory
review, which it is hoped will be completed during the last quarter of this     
year.                                                                           
6.   Cautionary Announcement                                                    
Shareholders are advised that the outcome of the discussions between the        
Partners and the BEE shareholders in Engen and Sasol"s Liquid Fuels Business, if
successfully concluded, may have a material effect on the price of Sasol"s      
securities.  Accordingly, shareholders are advised to exercise caution when     
dealing in Sasol"s securities until a further announcement is made.             
Further announcements will be made in due course.                               
Quotes                                                                          
Commenting on the merger, Pieter Cox, the Deputy Chairman and Chief Executive of
Sasol, said:                                                                    
"This transaction will create a South African national champion in the liquid   
fuels business.  Together with Petronas and our respective BEE partners we look 
forward to the joint venture"s development and success."                        
Tan Sri Dato" Mohd Hassan Marican, the President and Chief Executive Officer of 
Petronas, said:                                                                 
"The merger of Engen and Sasol"s Liquid Fuels Business is an exciting           
development in the next stage of our investment in Southern Africa.  Together   
these two businesses will have an enhanced platform on which to build and       
expand."                                                                        
Johannesburg                                                                    
Wednesday, 18 February, 2004                                                    
Contacts                                                                        
Sasol                                           Petronas                        
Cavan Hill  (011)                               George      (021)               
441 -3563                           Paul        418-8740            
Advisers                                                                        
Dresdner Kleinwort Wasserstein Limited ("Dresdner Kleinwort Wasserstein") is    
acting as financial adviser on this transaction. Edward Nathan & Friedland      
(Proprietary) Limited is acting as legal adviser to Sasol and Mallinicks Inc. is
acting as legal adviser to Petronas                                             
Sponsor to Sasol Limited:                                                       
Deutsche Securities                                                             
Disclaimers                                                                     
Disclaimer - Sasol Limited                                                      
We may in this document make statements that are not historical facts and relate
to analyses and other information based on forecasts of future results and      
estimates of amounts not yet determinable.  These are forward-looking statements
as defined in the U.S. Private Securities Litigation Reform Act of 1995.  Words 
such as "believe", "anticipate", "expect", "intend", "seek", "will", "plan",    
"could", "may", "endeavor" and "project" and similar expressions are intended to
identify such forward-looking statements, but are not the exclusive means of    
identifying such statements.  By their very nature, forward-looking statements  
involve inherent risks and uncertainties, both general and specific, and there  
are risks that predictions, forecasts, projections and other forward-looking    
statements will not be achieved.  If one or more of these risks materialize, or 
should underlying assumptions prove incorrect, actual results may be very       
different from those anticipated.  The factors that could cause our actual      
results to differ materially from the plans, objectives, expectations, estimates
and intentions expressed in such forward-looking statements are discussed more  
fully in our annual report under the Securities Exchange Act of 1934 on Form 20-
F filed on October 27, 2003 and in other filings with the United States         
Securities and Exchange Commission.  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.                                                            
Dresdner Kleinwort Wasserstein which is authorised and regulated in the United  
Kingdom by The Financial Services Authority is acting for Sasol and Petronas in 
relation to this transaction and is not advising any other person, and          
accordingly will not be responsible to anyone other than Sasol and Petronas for 
providing the protections afforded to customers of Dresdner Kleinwort           
Wasserstein or for providing advice in relation to the transaction.             
Notes to Editors                                                                
Information on Sasol                                                            
Sasol, with a market capitalization of approximately USD 10 billion, is an      
integrated oil and gas group with substantial chemical interests.  Based in     
South Africa and operating in 15 other countries throughout the world, Sasol is 
the leading provider of liquid fuels in South Africa and a major international  
producer of chemicals, using a world leading technology for the commercial      
production of synthetic fuels and chemicals from low grade coal.  In the future,
Sasol expects to apply this technology to convert natural gas to diesel and     
chemicals.  Sasol manufactures over 200 fuel and chemical products that are sold
in more than 90 countries and also operates coal mines to provide feedstock for 
synthetic fuels and chemical plants.  The company also manufactures and markets 
synthesis gas and operates the only inland crude oil refinery in South Africa.  
Internet address: www.Sasol.com.                                                
Information on Sasol"s Liquid Fuels Business                                    
Sasol"s Liquid Fuels Business includes all of Sasol"s assets in the liquid fuels
business, encapsulating the entire value chain from crude oil procurement for   
Sasol"s 64 per cent. stake in the Natref refinery to receiving blending         
components from the Synfuels refinery in Secunda.  All of Sasol"s assets in     
distribution and marketing as well as assets in the marketing and storage of    
fuel oil are also included.  Sasol"s Liquid Fuels Business further includes     
Sasol"s shareholding in companies such as Tosas (road binder business) and FFS  
(Fuel Firing Systems).                                                          
Information on Petronas                                                         
Petronas is the national petroleum corporation of Malaysia.  Incorporated in    
1974, Petronas has evolved into a fully integrated petroleum corporation engaged
in a broad spectrum of oil, gas and petrochemical operations.  Its business     
currently ranges from upstream exploration and production of oil and gas to     
downstream oil refining; marketing and distribution of petroleum products;      
trading; gas processing and liquefaction; natural gas pipeline operations;      
marketing of liquefied natural gas; petrochemical manufacturing and marketing;  
and shipping.                                                                   
Since the mid 1990s, Petronas embarked on an aggressive globalisation programme 
and currently has business interests in more than 30 countries worldwide.       
For the financial year ended 31 March 2003, Petronas recorded revenue of USD    
21,4 billion and an after-tax profit of USD 3,9 billion.  More than 75 per cent 
of the revenue was derived from its export and international operations.        
Information on Engen                                                            
Engen owns and manages a 125000 barrel per day crude oil refinery which produces
a wide range of petroleum products including base oils for lubricant            
manufacture.  Engen also owns a state-of-art lubricants blending plant.  In     
South Africa, Engen has a network of over 1250 service stations and over 450    
Quickshops.                                                                     
Engen is 80 per cent held by Malaysian state oil firm Petronas and 20 per cent  
by Worldwide African Investments Holdings, a black economic empowerment company 
created to promote the economic interests of those disadvantaged by South       
Africa"s former apartheid system.                                               
Date: 19/02/2004 02:30:11 PM Supplied by www.sharenet.co.za                     
Produced by the JSE SENS Department                                             
                                                                                
                                                                                
                                                                                



                                        
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