Nigerian independent oil and gas company, Seplat has said Oben-48 gas well would be completed in the last quarter of 2019.
The Oben field is central to Seplat’s future gas expansion plans and is strategically located as an important gas hub with access to Nigeria’s main gas demand centres. The Oben field is located in OML 4 and is the main producing field on the block.
“The Oben-48 gas well is expected to be completed in Q4,” Seplat said in its nine months 2019 financial presented to the Nigerian Stock Exchange (NSE).
Facilities on the block include a 60,000bpd capacity flow station, a 465 MMscfd capacity non-associated gas processing plant and an associated gas compressor station with five 10 Million standard cubic feet per day (MMscfd) compressors.
According to Austin Avuru, Seplat’s Chief Executive Officer, Seplat have set the next major growth phase of its gas business in motion having taken Final Investment Decision (FDI) for the large scale ANOH gas and condensate development, a development which will position Seplat as Nigeria’s largest supplier of processed gas to the domestic market.
Read also: 9M 2019: Seplat doubles profit on tax credit despite slump in oil & gas sales
The ANOH gas processing project is managed by Anoh Gas Processing Company (AGPC), an incorporated joint venture (IJV) between Seplat and the Nigerian Gas Company (NGC). AGPC seeks to develop a 300 mscfd midstream plant on OML 53 to process future wet gas production from the upstream unit.
BusinessDay analysis of Seplat’s revealed Gas sales of $105 million and tolling fees of $67 million take total gas derived revenue for the period to $172 million in nine months 2019 as gas sales reflect lower than expected gas production owing to constrained production from the Oben-47 well and delay in completing the Oben-48 gas well.
Khalil Woli, oil and gas analyst at Lagos-based CardinalStone said Seplat expects the first phase of the ANOH gas development project to be completed by Q1’2021, a development which is expected to increase Seplat’s gas processing capacity by 300 MMscfd to 825MMscfd upon completion.
The licence for the field was renewed in 2018 for a further 20 years and is next due for renewal on 21 October 2038.
In nine months 2019, Seplat grew after-tax profit by 103 percent to N56.6 billion from N27.96 billion. The growth was supported by the management’s decision to cut the income tax rate to 1.84 percent in 9m 2019 from 57 percent in September 2018.
“Given the company’s increasing disposition to growing output, these costs are likely to re-occur in the coming years. Irrespective, we remain positive on Seplat’s medium-to-long-term outlook and opine that a ramp up in production, supported by organic and inorganic initiatives, is likely to slightly offset the impact of moderation in oil price and higher rig related costs in coming periods,” Woli told BusinessDay.
Recall in April, Seplat Petroleum Development Co. and Nigeria’s state oil company announced it will raise $700 million for a joint gas project scheduled to start production next year as the government steps up plans to reduce the country’s reliance on oil.
For the execution of the first gas, Seplat will raise funds in tranches with the first three tranches raised with equity of $200 million, $100 million and $120 million respectively while the debt of $280 million will complete the funding requirements.
Management of the oil and gas firm assured that debt facility is expected to amortise over 5-7 years, adding that non-recourse to shareholders beyond $420 million equity injected upfront.
Local banks including but not limited to UBA, Zenith, Stanbic, Fidelity, FCMB, FBN, Access, Union, and Nova have been listed by the company as sources to provide achievable funding timelines. Seplat also mentioned its consideration of international lenders such as SCB, RMB, Standard Bank, BHGE, and Nedbank.
