Sasol CEOs Quit on Lake Charles Failures
The joint CEOs of South African energy and chemicals company Sasol are stepping down with effect from Nov. 1 following a review of its Lake Charles Chemicals Project (LCCP) in the US, which has suffered from ongoing delays and major cost overruns.
Bongani Nqwababa and Stephen Cornell, who took up their roles on Jul. 1 2016, have agreed to a “mutual amicable separation” in order to restore trust in the company, Sasol said.
“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,” the Johannesburg group stated.
While the company said some of the factors behind the cost increases and delays were common in projects of the size and nature of LCCP, some of the shortcomings could have been avoided.
It cited inappropriate conduct and a lack of competence by LCCP’s project management team, which had an “excessive” focus on maintaining cost and schedule estimates at the expense of providing accurate information to oversight bodies. The review also highlighted inadequate control procedures and a culture of “excess deference.”
The cost of the Louisiana ethane-based complex, which comprises a 1.5 million t/y ethylene plant and six derivative units, is now expected to range between $12.6 billion and $12.9 billion, compared to the original estimate of $8.9 billion.
Three senior vice presidents with roles in the project have left by “negotiated separation” and another senior executive that was in charge of the LCCP is facing disciplinary action.