South Africa’s Sasol is the world's only  commercial-scale synthetic oil producer.

Founded in 1950, they convert millions  of tons of oil from coal each year.

In 2011, high oil prices turned them into South  

Africa's second most valuable company -  with stock returns of 1000% since 2000.

Then they took a massive swing on a  multi-billion megaproject in Louisiana.  

It could have transformed them into  an international chemicals giant.

Instead, it smashed them to bits. In today's  video, South Africa's synthetic oil giant,  

and the $13 billion US megaproject that ruined it.

## Beginnings One of the key reasons for Germany's defeat in

World War I was that the country  had no significant oil reserves.

But Germany does have plenty of coal, especially  a soft brown type called lignite. Being a younger  

type coal, lignite has low carbon content  and high moisture. It crumbles quite easy.

So after World War I, the government  began researching possible ways to  

turn these huge reserves of coal into oil.

In 1923, Franz Fischer and Hans Tropsch  discovered a method of doing so.

It is named after them: the  Fischer-Tropsch, or FT process.

FT is an indirect conversion.  Meaning that we first turn coal  

or natural gas into an intermediate product called  

syngas. This is done by burning coal  in the presence of oxygen and steam.

Syngas is primarily just hydrogen and carbon  monoxide along with a bunch of contaminants.  

The syngas is then purified of toxins and  contaminants in a step called "cleanup-and-shift".

After this, we pass the syngas over  a special catalyst - usually iron  

and cobalt - at a moderate temperature  and pressure inside a special reactor.

The syngas molecules break  apart on the catalyst surface,  

and then reassemble as chains of carbon  and hydrogen. The end result is a  

hodgepodge of liquid and gas hydrocarbon  byproducts, including fuel oil or gas.

This chain reassembly process is  random, but follows a distribution.  

The output mix can be tweaked using  various catalysts and conditions.

Various sides in World War II studied and  implemented variants of the FT process,  

as well as other coal-to-oil  technologies. It was a critical  

part of the German war machine. The  Japanese built a few plants too.

And the United States also invested  money into synthetic fuels - passing  

the Synthetic Liquid Fuels Act  of 1944 to augment oil supplies.

But even during the war and with  massive German government tariffs,  

synthetic oil was never economically competitive  - costing about 2-3 times more than imports.

That disadvantage worsened after the war’s end  and with the emergence of major oil discoveries  

in the Middle East. The world shifted away from  FT and it sort of faded. Except in South Africa.

## The First Plants

Like Germany, South Africa has  large reserves of coal, but no oil.

So they followed developments in the coal-to-oil  technology space over in Germany closely. They saw  

it as a way to fulfill domestic energy needs  while also building an industrial competence.

In the 1930s, a large South African mining  conglomerate called the Anglo-Transvaal  

Consolidated Investment Company, or  Anglovaal, licensed the FT process  

and through a subsidiary called SATMAR built  the first synthetic oil plant in the country.

However, SATMAR's oil - made from an oil  shale rock called torbanite - was only  

competitive with the benefit of tariffs. The  company lobbied the government for protections  

and financial support of about 16 million  South African pounds for a larger plant.

## The First Plant

The government was at first hesitant -  still hoping to strike oil somewhere.

Until finally in 1947 they passed an act  and formed an advisory board. But gradually,  

it dawned upon them that if this was  going to be economically competitive,  

then it would have to be the single biggest  industrial undertaking in the country's history.

Anglovaal for their part was struggling  to raise capital overseas for the project.  

Banks and economic development  lenders questioned the economics  

of the FT process even with the benefit  of South Africa's cheap coal and labor.

The fundraising got harder after the National  Party - led by the descendants of Dutch and  

French settlers called Afrikaners - won the  1948 election, and began to set up apartheid.

It became increasingly clear that  the project would require money  

and industrial protections that only  the government can provide. If so,  

then the nationalist-minded Afrikaners believed  that such an asset should be state owned.

A massive devaluation of the South African  pound in 1949 made imports extremely  

expensive - further crippling the company's  ability to handle the project. So in the end,  

the company decided to go back to mining gold.

Thusly the South African government acquired  the FT process license from Anglovaal.  

Then in September 1950 they established the  company South African Synthetic Oil Limited,  

or Sasol, through its Industrial  Development Corporation, or IDC.

The official name was then changed to South  African Coal, Oil, and Gas Company - because  

some people thought the term "synthetic  oil" drew uncomfortable comparisons with  

"fake oil" and WW2 Germans. But Sasol stuck and  it eventually became the official name anyway.

Sasol was celebrated as a step  towards building a diversified,  

powerful industrial economy. South Africa,  proponents said, had enough "oil potential",  

meaning coal, to last for the next 500 years.  The end of the country's energy concerns.

## Building the First Plant

The company's founding board of directors and  management team were quite competent. Stacked  

with engineers and experts inherited from  the old Anglovaal synthetic oil organization.

And because it was only indirectly  owned by the government through the IDC,  

it ran with largely little interference.  Though Afrikaners did express concern  

about over-representation of English  speakers and foreigners amongst the ranks.

The company immediately faced struggles as  it tried to build its first plant - which I  

shall refer to as Sasol I - in 1952  with the aid of American engineers.

Sasol I ran two types of Fischer-Tropsch  units. The first used a fixed-bed reactor  

pretty much like the ones  that the Germans used. Here,  

the catalyst sits in tubes, and the  syngas flows through and around it.

Five very large units of these were installed.  Such reactors are simple and easy to run,  

but tend to suffer heating issues. It  also tends to produce more higher boiling  

point materials like waxes and diesel  oils. Less so stuff to make gasoline.

The second type reactor utilized  an American design from MW Kellogg  

called a fluid bed. Here, the  reactor is filled with small,  

almost sand-like catalyst particles. Syngas then  bubbles through it like as if it were a fluid.

The fluid bed conceptually offered better  mixing and superior thermal effects,  

but had never been commercialized before. It was  completed in early 1955. Products were delivered  

in August and by November, Sasol employees  were filling their cars with Sasol petrol.

But problems then forced a shut down in early  1956. After American and German experts failed  

to troubleshoot, Sasol's own experts took over  and did a redesign. The final working design,  

completed in 1957, was uniquely South African:  

The Sasol-Synthol process, an  impressive technical achievement.

Sasol I was located in its own city called  Sasolburg, about fifty miles outside Johannesburg.  

It sits near a titanic coal mine and reservoir,  providing the site with key raw materials.

By all measures, it was an impressive achievement.  Nine "Lurgi" generators turning coal into syngas  

for the fixed and fluid-bed reactors to  turn into hydrocarbons. The build consumed  

16 million man-hours, 80,000 cubic meters  of concrete, and 320 kilometers of pipe.

## A Strategic Asset The thing also cost a whole lot of money:

100 million rand or about half a billion  dollars today. A substantial overrun.

And despite having unprecedented  economies of scale - Sasol I's  

five fixed-bed reactors had the  same capacity as 75 similar design  

reactors used during World War II - the  company still turned an operating loss.

Rather than trying to add more capacity  to find economies of scale, Sasol instead  

diversified into fertilizers, synthetic rubber,  tars, chemicals, explosives and plastics.

The idea was to take advantage of the FT  process's various hydrocarbon byproducts,  

which presumably can be sold at higher value.

The company remained in the red  throughout the 1960s. But the  

government kept subsidizing Sasol  with oil import tariffs and price  

floor protections until eventually  it showed a form of profitability.

This was all for strategic reasons.  The South African Apartheid government  

wanted to save foreign currency for other  imports. It also believed that it might  

one day lose its primary oil sources  in the United States and Middle East.

In December 1958, the first All-Africa Peoples'  Conference made the first call for a worldwide  

trade and diplomatic boycott against South  Africa for its racial segregation policies.

Then in 1960, police opened fire on a  group of unarmed protestors opposing  

Apartheid laws - the Sharpeville massacre.  Between 69 to 90 people were killed.

The massacre triggered a massive uprising in the  

South African Black population  and international condemnation.

In 1964, the first oil-producing  Middle East nation joined the boycott.  

Kuwait broke all diplomatic and  commercial relations with South Africa,  

including oil shipments. Threats  of further sanctions intensified.

## Sasol II and III

In 1973, the global energy  crises propelled Sasol forward,  

enabling it to build its largest complex yet.

OPEC's oil embargoes caused prices to  finally close the gap between South  

African imports and domestic synthetic oil,  helping the company turn a sturdier profit.

Despite Sasol's relatively minor contribution  to the country's overall oil supply - about  

30% - increasing isolation and crisis moved  the company to the center of South Africa's  

energy policy. Its unique coal-to-oil  style garnered attention from abroad.

It gave Sasol the oomph to finally  make their next big expansion in 1974:  

A second major plant called Sasol II.

Located in a new area called Secunda,  Sasol II would have three times the  

capacity of its predecessor. It  also cost a staggering $3.2 billion.

Then as Sasol II neared completion in 1979,  

the Shah of Iran fell. The new Iranian regime  banned oil to South Africa - triggering a  

major crisis because Iran provided  90% of the country's imported oil.

South Africa - to the dismay of  many - evaded collapse thanks to  

existing oil stockpiles and open  market purchases at high prices.

But the panic motivated a third complex:  Sasol III, located next to Sasol II in Secunda  

and basically a clone of it. Building this  complex would cost an estimated $3.8 billion.

To get the money, the increasingly  impoverished South African government  

privatized Sasol - selling a 70% stake  into the Johannesburg public markets.

## A Weird Position In the decade following the privatization,

Sasol occupied this strange  space between public and private.

On one hand, Sasol was a private company with  many foreign investors. Yet on the other hand,  

its core synthetic oil business heavily  depended on government market intervention.

Including tariffs to artificially  "adjust" the oil import price to  

match the synthetic oil price, as  well as guaranteed price floors.

Moreover, the company's position at the core of  

the Apartheid state's energy policy put it  in the crosshairs of activists. In 1980,  

the refineries at Sasolburg and Secunda  were both bombed by African nationalists.

The company also struggled with labor turmoil.  Trade unions agitated for better working hours  

and pay - striking in 1987 and 1989. Both  times, the company cracked down with violence.

Finally in 1990, the National Party-led  government turns from Apartheid. Black-led  

political parties were unbanned,  Nelson Mandela was released from  

jail, and talks began - leading to the  country's first free elections in 1994.

For Sasol, this meant massive change. In 1993,  

41% of profits derived from its position  in the protected oil market. With Apartheid  

ending and economic sanctions lifting,  this protected position would not last.

But the new ANC-led government opted  for a slow phase-out of these subsidies,  

giving Sasol's management some time to  figure things out. So what then to do?

## Diversification

At first, Sasol considered exporting coal abroad.  Sasolburg had a big underground coal mine.

But the wider coal industry rejected working  with them because of the perception that  

they would leverage their taxpayer  subsidies to apply pricing pressure.

So instead, Sasol embarked on a broad  diversification into petrochemicals. This  

began with the 1995 acquisition of a wax business  in Germany to form the division Sasol Wax.

And a merger of subsidiaries  with another company in 1997  

to form a joint venture producing  aromatic chemicals like phenolics.

As well as two other acquisitions to  create Sasol Nitro - a maker of ammonia,  

fertilizers and things that go boom. These  diversifications seemed to pay dividends for  

Sasol. Their chemicals division contributed  about a third of total profits in 1995.

In 2001, the company took another major step  forward with the 1.3 billion euro acquisition  

of CONDEA, a German chemical firm with  operations in Europe, Mainland China,  

and the US. The latter included a facility  in the area of Lake Charles, Louisiana.

## Gas to Liquid

Another of Sasol's corporate  strategies was to leverage  

their perceived technical R&D strengths  for the growing natural gas industry.

The center of that strategy was a  technology called Gas-to-Liquid or  

GTL. Natural gas is a common  byproduct of oil production.

But natural gas's gaseous nature  made it difficult to transport.  

So they often flared it away for  safety reasons - a bit wasteful.

GTL turns that natural gas into liquid fuels  and chemicals via syngas. It is a riff on  

Sasol's original coal-to-oil process except  that you take in natural gas instead of coal.

The economic justification for doing GTL - and  taking on the energy losses that come with it - is  

to make that otherwise-unmovable  natural gas more transportable.

Kind of like turning perishable milk into  cheese. So in a way, it competes with LNG.

To encourage their technology,  

Sasol struck a collaboration deal in  1999 with the American giant Chevron.

Two years later, Sasol struck a  joint venture agreement with Qatar  

to produce a GTL plant to rescue  so-called "stranded" natural gas.

This eventually led to their first official  overseas GTL plant in late 2003, the Oryx GTL  

Project. The plant started operations  in 2007 after a slight delay. Sasol,  

a 49% partner, hailed it as proof that GTL works.

Lifting all of this were booming  oil prices. After a long slump,  

oil prices started rising in 1999  due to geopolitical crises in the  

Middle East and high demand in emerging  economies like India and Mainland China.

When oil prices are high, Sasol's  coal-to-oil processes mint money.  

Revenues soared from $11.5 billion  USD in 2006 to $21 billion in 2011.

Profits were good too, with operating margins at  

an excellent 20-26%. Why? Because oil  prices were so high, coal was so cheap,  

and Sasol's Apartheid-era plants  in Secunda were fully depreciated.

## The Big Swing

In 2011, Sasol appointed a  new CEO, David Constable.

Constable was Sasol's first outside CEO,  

coming from the engineering company Fluor.  Upon joining, he looked at macroeconomic  

conditions and saw what he felt were the  planets aligning on a massive opportunity.

In 2008, technological advances in horizontal  drilling and fracking were unlocking previously  

unreachable sources of natural gas,  particularly in the United States.

The Shale Revolution as it was  dubbed caused US natural gas prices  

to fall from $12.30 per million British  thermal units in mid-2008 to as low as  

$2.69 in 2009. They did recover a bit  but remained in the $4 range in 2011.

Yet during this same time, oil prices  hovered at an eye-watering $100 per barrel.

Sasol saw the resulting price gap between oil  and natural gas as an arbitrage opportunity.  

Since their technology can start with  any carbon fuel, including natural gas.

From there, an idea started to come  together for a massive investment in  

the United States. One that can take  in cheap US natural gas and turn it  

into valuable petrochemicals that can  be sold into the lucrative US market.

This US growth program had compelling  motivations. In 2011, about half of Sasol's  

profits came from selling plastics and refined  petrochemicals. This was an opportunity to raise  

that proportion even more - moving away from oil  to create a truly diversified chemicals giant.

There was also a geographical  diversification opportunity.  

Almost all of Sasol's revenues and profits  then were being generated by assets based  

in South Africa. Producing in the United  States can help on cost and operations.

Moreover, Sasol already owned a facility and  raw land in the Lake Charles area in the state  

Louisiana from the CONDEA transaction. Expanding  an existing site seemed better than starting from  

scratch. Lake Charles was also near many of  America's largest oil fields, so lots of gas.

The Louisiana state government also offered as  much as a billion dollars in economic incentives.  

Considering all this, Sasol and its management  felt the time was right to try something big.

## Lake Charles

In late 2011, Sasol announced its goal to  build the Lake Charles Chemical Project,  

a fully integrated chemical complex.

Constable did the media conference announcement  alongside then-Louisiana governor Bobby Jindal.

As originally announced, the Lake Charles  Chemical Project would comprise of two  

facilities, integrated together and dual-tracked.

The first half of the complex was  a massive Gas-to-Liquids plant,  

the first of its kind in the United States.  The GTL plant will take in cheap natural gas  

and churn out premium diesel fuel,  naphtha, paraffin and other waxes.

Initially estimated to cost about $8-10  billion, the GTL plant would be delivered  

over two phases in 2018 and 2019. It would also  create 850 direct jobs and 4,500 indirect jobs.

The second half would be an ethane cracker. Yes,  

that is what they actually call it.  Natural gas has several components,  

one of which is ethane. Ethane by itself is  not very useful except for burning stuff.

But crackers can break down or "crack" that  ethane into molecules like ethylene using  

thermal or catalytic processes. Ethylene can then  produce commercially valuable goods like plastics.

The late 2011 estimate said that the Lake Charles  ethane cracker would cost about $4.5 billion  

and start up in 2014. A generational  swing for the fences. If done right,  

Constable said that it will drive  Sasol's growth for years to come.

Ernst Oberholster, the company’s managing  director for new business development,  

told the Financial Times in 2011:

> The US has significant  reserves of clean-burning gas,  

and because this supply has limited  demand, the price is depressed.

> And most commentators believe it  will stay at reasonable levels ... We  

are confident that with our view of  future prices, the project will work.

## Bad Signs

The announcement happened late 2011, but  Sasol did not begin significant front end  

design work on the integrated project  until a year later in December 2012.

This was due to a long 18-month  feasibility study. Lake Charles  

had two integrated projects. The ethane  cracker technology was pretty standard,  

but the GTL plant ran a Sasol-only  process. It was big and complicated.

And then there were labor shortages. Giants like  Chevron, Exxon Mobil, Dow, and ConocoPhillips were  

all trying to get projects built in Louisiana  - and there was simply not enough workers.

The full Lake Charles Project was estimated  to need 7,000 workers. A hard ask when the  

labor shortage situation was so bad that  Conoco's CEO said in March 2013 that,  

"If you can spell ‘shale,’ you can get a job."

As a result, the cost estimates started rising.  

The GTL plant cost estimates rose about  $3 billion to $11-14 billion. Estimates  

for the cracker project rose $1-2  billion to $5-7 billion in total.

Internally, serious concerns were raised about  Sasol's ability to deliver such a megaproject.  

In 2013, a South African law firm called  Werksmans Attorneys gave Constable an internal  

report detailing serious problems at an ongoing  wax facility project in Sasolburg, South Africa.

That wax factory was called FTWEP.  Originally costed at a billion dollars,  

the build ran 40% over budget and  resulted in a $100 million writedown.  

Werksmans' probe found that employees had  deliberately hid bad news about progress.

And that was South Africa. If Sasol can't  deliver a $1 billion wax factory in their  

own backyard without major problems,  how can they be expected to deliver a  

$20+ billion integrated chemical facility  in another country 17 flight-hours away?

At this point, the company still had a  chance to say no. Starting in March 2014,  

Sasol's stock went on a tear, breaking 600  rand per share in August. Measured in USD,  

their market cap was $37 billion.  Since 2000, the stock returned 1,000%.

So the management had the credibility  to turn their backs on the project.  

But in late October 2014, they made  the final investment decision to go  

forward with the ethane cracker. By then,  things were already starting to go bad.

## Things Start to Go Bad

Starting in mid-2014, oil prices pancaked from  

$100 per barrel to the mid-40s  by the end of the year.

Why? Short story. US shale oil  started to hit the market. But  

OPEC refused to cut production and  yield market share. At the same time,  

economic issues in Europe and Mainland  China hurt oil demand, creating an oil glut.

The price gap between natural gas and  oil vanished - ruining the economics  

for new GTL plants. In a prescient move, Shell  canceled a $20 billion GTL project in late 2013.

In January 2015, Sasol announced that it would  

shelve the GTL portion of the  Lake Charles chemical project.

An oil executive told the Wall Street  Journal that Sasol executives overly  

focused on natural gas prices going up. They  never expected that oil prices would go down.

The GTL plant was finally killed in 2017,  

along with plans for another  facility to be built in Canada.

But the ethane cracker - and six  downstream chemical units - moved forward,  

despite ethylene prices also  falling. The prevailing belief,  

as explained in an investor presentation, was  that polyethylene demand would stay strong.

Sasol also argued that their cracker  was meaningfully different from the  

other crackers then being built in the area.

Oh, by the way. In August 2016,  Sasol raised the cost estimate  

for the ethane cracker yet again  from $5-7 billion to $11 billion.

An investor report noted that this was due  to a combination of higher labor costs,  

higher contractor costs, too many rainy days,  and extra design work required when the Lake  

Charles site was found to have poorer  ground foundations than anticipated.

Constable told the press that Sasol  was confident it was going to get  

delivered and that the $11 billion was  a "worst-case scenario" type estimate.  

$11 billion also happened to be more than half  the company's $18 billion market cap at the time.

Moreover, Constable was already out  the door at Sasol. In June 2015,  

he announced that he would not extend his  contract. It raised eyebrows considering  

he hadn't yet delivered the  megaprojects that he started.

Sasol's chairman said that the company  wanted a leader with a "long term view".  

One fund manager said in mid-2015:

> This is not usual – the announcement  comes as a bit of surprise ... it is  

concerning that David Constable’s departure  coincides with the implementation of Sasol’s  

largest investment ever – this is  not ideal and cause for concern

Constable's replacements were  two Co-CEOs: Bongani Nqwababa,  

Sasol's CFO, and Stephen Russell Cornell,  their EVP of international operations.

## This is Fine

As late as 2018, Sasol still held out the story  that the plan for Lake Charles was being executed.

In an 2018 interview with Bloomberg, the two  co-CEOs said that the facility would bring in over  

a billion dollars a year in revenue and transform  the company into an international chemicals giant.

Co-CEO Tony Cornell said that they were  already looking forward to doing "bolt-on"  

acquisitions. When Sasol reported their  annual results in August 2018, he added:

> The project cost is still within  the market guidelines of $11 billion,  

and good progress is being made.

So it came as a major surprise in early  February 2019 when Sasol announced that  

they were pushing back the cracker's  start date by five months and raising  

the final cost by another $500  million to about $11.8 billion.

Sasol management explained that as late as  mid-November 2018 they originally thought  

the plant construction to be on track and that it  would be producing salable product before 2019.

Small problems had been reported  with the carbon steel flanges - the  

rings connecting pipes together or joining pipes  

to pumps - but management thought those  were contained. One month delay at most.

It soon became however clear that the steel  flange problems inside the core ethane Cracker  

as well as the ethylene oxide/ethylene glycol  units were far more extensive than anticipated.

An external consultant had to be brought in.  And it was then realized the changes would need  

$210 million and 2-3 more months to fix. The  

engineering contractor firms had  to issue 8,000 drawing revisions.

The time delay was serious because it  meant Sasol's cracker comes online the  

same year as three others from South Korea,  Taiwan, and Japan. With 4.2 million tons of  

ethylene capacity all scheduled to hit  in 2019, oversupply nightmares abounded.

## Fool Me Once ...

By now, Sasol's management had  lost faith in their own team.

After the February debacle, Sasol's  big shareholders asked management if  

they were sure that this was it.  Turns out it wasn't. In May 2019,  

they announced that the cost estimate would rise  another billion dollars to $12.6 to $12.9 billion.

Some of the work done to fix the  steel flanges had damaged critical  

path activities inside the Ethane cracker. The  heat exchangers also suffered some corrosion.  

They had to fix all that,  adding another $210 million.

Another $180 million came from certain work  contracts that Sasol discovered that it  

owed. Yeah that one happens to me too.

And most vexingly, $230 million  of additional cost because Sasol  

duplicated how much money they were  going to get from the Louisiana state  

government for finishing the project.  Real first-year analyst type error.

Investors were rightly infuriated.  Then just to rub salt into the wound,  

in early 2019 South Korean chemicals  giant Lotte finished their own ethane  

cracker - literally sitting right next to  Sasol's albeit smaller - for just $3 billion!

In October 2019, co-CEOs Nqwababa and Cornell  and other members of the management team were  

fired. The company framed this move as  taking responsibility for the failure.

Fleetwood Grobler, EVP of the chemicals division,  

took over as CEO. To retain cash for the  project, Sasol also canceled the dividend.

## COVID

And then in 2020, the COVID  pandemic hit. Lockdowns across  

the world caused oil prices to crash  so hard they went negative for a time.

In August 2020, the company reported  that revenues fell from $14.4 billion  

to $10.9 billion. The company also reported a  substantial $5 billion loss due to low prices  

plus writedowns in the base chemicals  business and some South African assets.

Sasol took on a lot of debt  to finish the project. The  

$10 billion of debt threatened  to take them down entirely.

A few months later in October, they sold a  50% stake in the Lake Charles complex - which  

cost them $12.6 billion to build - to the  American chemical company LyondellBasell for  

$2 billion. LyondellBasell also  agreed to operate the plant.

The last of the seven chemical plants in Lake  

Charles finally started up in  November 2020. Long overdue.

## Conclusion

At both home and abroad,  Sasol faces major challenges.

Back in South Africa, Sasol faces  down daunting carbon emissions and ESG  

commitments. Their titanic plant at Secunda  has been called the world's largest carbon  

emitter by volume. But shutting down their  core business is not financially viable.

Overseas, the chemicals business  - once held up as the company's  

future - has suffered from a growth  slowdown in chemicals post-COVID,  

debt from prior acquisitions, and  increased competition from China.

It requires a brutal turnaround. A long and  painful road to recovery lies ahead. New  

head Antje Gerber recently proposed to shut  down or mothball four Sasol plants overseas.

Today, Sasol's market capitalization stands at  about $3.9 billion - having fallen 90% from its  

2014 peak. It seems unlikely that the 70-year old  synthetic oil icon is coming back any time soon.