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Seplat to seek dual listing on NSE, LSE

Seplat to seek dual listing on NSE, LSE

The entrance of indigenous oil companies into international capital markets gains momentum, as Seplat Petroleum Development Co, worth over $1.6 billion, seeks to raise more funds through a dual listing in London and Lagos. The move is seen as a clear departure from the past when owners wanted to be the only shareholders of their companies.

The company will join other Nigerian oil concerns trading on the London Stock Exchange (LSE), whose value is estimated at $4.2bn (N649bn). Nigerian oil companies trading on the LSE include Afren, Eland Oil & Gas, Heritage Oil, Mart Resources and MP Nigeria.

In what is the latest of listings on LSE by Nigerian oil companies, Lekoil was recently admitted to the London bourse after listing on its Alternative Investment Market (AIM). The company raised approximately $50 million, giving it a market capitalisation of $112.1 million at admission.

According to the Nigerian Stock Exchange (NSE), the entrance of more oil and gas companies into the Nigerian capital market is expected to contribute about N265 billion to the $1 trillion market capitalisation target of the bourse. The NSE seeks to achieve $1 trillion market capitalisation by 2016.

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Seplat, which recently bought several oil assets in the Niger Delta from Royal Dutch Shell Plc, is working with BNP Paribas SA, Standard Bank Group Ltd and Renaissance Capital Financial Holdings Ltd, to actualise its dual listing target.

“The LSE being the premium exchange in Europe, specifically designed to cater for particular needs of different companies, provides great opportunities for Nigerian local oil companies. The presence of these indigenous companies on a foreign stage would greatly enhance foreign direct investment. Other local players would follow suit. This is good for Nigeria, and it conforms to the NNRC’s principle of ensuring resource revenue is used primarily to promote sustained, inclusive economic development through enabling and maintaining high levels of investment into Nigeria,” said Ademola Oshodi, project manager, Nigerian National Resource Charter (NNRC).

“It is a good development that Nigerian oil and gas companies are now going into the stock exchange in Nigeria and outside. It is a clear departure from what obtained in the past, when owners wanted to be the only shareholders of their companies. Listing on the stock exchange will open up opportunities for the companies as it will enable them to raise funds for more exploration and production activities and also spread risks,” said Adebayo Akinpelu, managing director, Fixital Nigeria Limited.

Seplat acquired stakes in three onshore Oil Mining Leases (OMLs) 4, 38 and 41 from Shell/Total/Agip. The acquisition represents a 45 percent stake in the three leases located onshore in the Western Niger Delta region, with the Nigerian National Petroleum Corporation maintaining a 55 percent stake, which has been transferred to its subsidiary, Nigerian Petroleum Development Company Ltd.

Following the acquisition of the oil blocks, the company became the

operator of the Seplat/NPDC Joint Venture and has been able to double production to 43,000 barrels per day.

The company was formed in 2009 by a merger of two Nigerian exploration and production (E&P) companies Shebah E & P and Platform Petroleum, as a Special Purpose Vehicle for the acquisition of the 45 percent interest in the OMLs. Maurel & Prom later acquired 45 percent equity in the new-formed company, while Shebah E & P and Platform retained 55 percent to maintain Seplat’s indigenous status. The French energy company came on board with a track record in Exploration and Production operations in countries such as Gabon, Republic of Congo, Tanzania and Colombia.

The acquisition marked the first time a Nigerian independent company would acquire a major stake from an International Oil Company, coupled with a smooth transfer of operatorship.

At the completion of the acquisition on July 30, 2010, the company assumed operatorship and production from the assets, accounting for a daily production of over 30,000 barrels of oil per day.

Seplat, which is one of the few E & P companies in the country whose operational base office is located within its host community, recorded a milestone when it signed a Global Memorandum of Understanding with its oil producing host communities in Amukpe, Oben, Sapele and Ugborhen.

In May 2011, the company recorded a safety milestone of one million Man-hours without a Loss Time Injury (LTI). Under SCHICS, an acronym for Seplat Hazard Identification and Control Scheme, launched by its HSE department. Employees are encouraged to record unsafe acts and conditions observed at work site.

LTI is an industry Key Performance Indicator (KPI), which measures adherence to safety requirements by evaluating the number of injury-bearing incidents capable of preventing a worker from performing or continuing with a task.

The company, which is being led and managed by a board made up of oil and gas professionals and business experts with a combined cognate experience of over 150 years in the petroleum industry, has A.B.C Orjiako, surgeon and chief executive officer of Shebah E & P, as its chairman.

Austin Avuru, a well site Geologist with 30 years experience, is the managing director and CEO of the company.

Other directors on the board include Jean-Francois Henin, economist and chairman of Maurel & Prom; Michel Hochard, chartered accountant and former director of finance at Elf Aquitaine; Mac Ofurhie, geologist, was director at Department of Petroleum Resources and Managing Director, NPDC, and Nasir Ado Bayero, a Mass Communication B.A who worked with an oil firm in Houston, Texas.