Sasol, which has in the past year been impacted by volatility in the oil price, said on Wednesday it has adjusted its hedging programme, which was aimed at providing protection against oil prices below $43.11 per barrel.
It said existing oil hedges of 24 million barrels for financial year 2022 have been restructured and replaced by a zero cost collar hedging structure.
"This has allowed the company to increase the gross average floor oil price on the existing 24 million barrels from $43.11 per barrel to approximately $60.09 per barrel...with a cap of approximately $71.97 per barrel," said a statement.
The company said the updated hedging levels underpinned the strengthening of its balance sheet and the reduction of debt levels. Sasol had in the past months embarked on a divestment programme aimed at strengthening its balance sheet and sold numerous non-core assets and stakes in entities where it operates.
"One of the company's main objectives remains to reduce absolute debt levels, which will trigger the consideration to resume dividend payments," it said.
"Debt metrics are currently following a positive trajectory but may still be negatively impacted by oil price volatility."
In February, Sasol said its debt as at 31 December 2020 stood at R126.3 billion, compared to R189.7 billion as at 30 June 2020.
Last month, the pretrochemicals group agreed to sell a 30% stake in a natural gas pipeline running from Mozambique to South Africa for as much as R5.1 billion.