FG commends SEPLAT’s achievements in Nigeria’s oil & gas sector

The Federal Government has commended Seplat Petroleum Development Company plc (SEPLAT) on its phenomenal achievements and remarkable successes within just 10 years in the Nigerian Oil and Gas Sector.

Timipre Sylva, Minister of State for Petroleum Resources, gave the commendation at the just concluded SEPLAT ENERGY SUMMIT 2020 themed “Business Sustainability and Strategic Leadership in Africa”.

The minister as Special Guest at the summit said, “It is worthy to state here that SEPLAT was awarded some divested assets based on the Federal Government aspiration to develop indigenous capacity in the Nigerian Oil & Gas sector about 10 years ago. And over the past ten year, Seplat has recorded monumental achievements and have grown to become a leading independent upstream Oil and Gas company in Nigeria.”

Some of the key achievements in ten years of operations include: Successful acquisition of SPDC and CNL divested assets and appointment as Operators; Operated nine (9) drilling rigs (2 swamp drilling barges and 7 land drilling rigs) and attained peak activity of eight (8) drilling rigs concurrently in 2014 – highest in the industry/Africa by an operator at the time; increased average daily Crude Oil production from approximately 14,000bopd in 2010 to a current level of about 60,000bopd within the first 3 years and sustained the average production. Seplat also increased Oben gas plant processing capacity from 90mmscfd to 465mmscfd.

“Seplat is today a leading gas supplier to the domestic market with about 350mmscfd supplied to the domestic market daily. This has contributed to the growth in the nation’s power generation capacity and supports the government’s diversification agenda.

“Developing the Assa North/Ohaji South (ANOH) 300mmscfd greenfield gas and condensate plant in OML 53. The development is in partnership with NGC on a 50%:50% basis. This project will deliver additional 300mmscfd to the domestic market at completion. The project is ongoing.

“Seplat is currently operating and managing three (3) flowstations in OMLs 4, 38 and 4 (Oben – 60,000bopd, Sapele – 60,000bopd and Amukpe – 45,000bopd) with Liquid Treatment facility of 150,000bopd and two 50,000 barrels crude storage tanks. These achievements are commendable and needs to be emulated by other indigenous oil and gas companies,” he told participants at the virtual summit.

“Permit me to set the tone of this year theme which is a topical issue by starting from. Global Impact of COVID-19 Pandemic on the Oil & Gas Industry; COVID-19 and Nigerian Oil & Gas Industry; Strategies to strengthen the Nigerian Oil & Gas Industry-“Business Sustainability” and finally; and Diversification – “2020 The Year of Gas”

The minister noted that the COVID-19 pandemic has indeed taken on the global Oil & Gas Industry with cascading impacts to other sectors.

“It is not only an health crisis, it is both economic and security threat to nations, especially when revenue from oil and other sources cannot fund the Government BUDGET. However, it is not a dead end, but an opportunity to see things from different perspectives and act differently. The global world economy is forecasted to decline by about -3.4% in 2020 due to the impact of the pandemic compared to 2.9% growth globally in 2019. From OPEC analysis, global average oil demand declined by about 8.49 million barrels/day and Oil prices (brent) went down as low as $10/bbl in April 2020 due to economic impact of COVID-19 coupled with the fallout between Saudi Arabia and Russia on the agreed volume of crude oil supply to energy market. The fallout between Saudi Arabia and Russian was a major factor that led to global supply glut leading to crude oil supply & demand imbalances, thus leading to the drastic drop in oil price.”, he stated.

“Going forward, we foresee that global upstream investment will continue on the decline trend and recovery is likely to come beyond 2022. In the US, total oil rig count declined significantly from 678 rigs in March 2020 to 287 rigs in June 2020”, Sylva added.

“The areas impacted by the pandemic in the Nigerian Oil & Gas Sector are as follows: Market & Revenue Instability (Demand-Supply Imbalance); Revenue decline due to low oil price;  Pressure on Nigeria crude oil selling price (OSP) due to supply glut and lack of buyers; Production Uncertainties due to refineries shutdowns in major refining centers across Europe and Asia. Decline in demand of crude oil due to global lockdown; Investment deferment and cancellation resulting in huge lost from potential investments and associated benefits such as employment and taxes to Government; Project delivery risk – reduced access to capital and slow down progress of project execution.”, the minister stated.

He added that the huge revenue lost due to sheer drop in oil price arising from supply-demand imbalance has significantly impacted the Nigerian economy due to Budget deficits and delivery challenges (revised from $57/bbl to $27/bbl), project slippages, job losses in the private sector, and so on.