NAPENews Magazine September 2022 Edition

Seplat's Divestment Opportunities Journey.
Lessons Learned, Best Practices
and Success Story .
The special presentation on Seplat's Divestment Opportunities Journey, Lessons Learned, Best Practices, and Our Success Stories… What Next Post
Divestments – Vision 2030 by Mr. Roger Brown, CEO of Seplat Energy PLC, at NAPE's Divestment Workshop captured the following:
The Evolving Landscape (What You do to Address the Future Change)
funds raised at its IPO as dividends, showing that
it has a strong ability to raise capital and pay
dividends. This is an indication of Seplat's
capacity to participate in the divestment process.
The Independent Petroleum Producers
Group(IPPG) is an association of indigenous
Exploration and Production (E&P) companies.
The association boasts of membership of fastgrowing
companies with investments of more than
$25billion over the last 10 years; covering over
$10billion in acquired assets and $15billion in
CAPEX development. With over 20% growth in oil
and condensate, 10% growth in gas production,
the IPPG is committed to domestic gas supply,
with 60% of the majority of domestic gas coming
from Seplat and ND Western (leading).
Indigenous players have achieved a lot and still
have more to achieve in the future. In terms of
reserves and production growth, the IPPG's
current gas production capacity is over
600MMscf/d, making IPPG the best place to
further grow reserves onshore and in shallow
water.
Nigerian LNG is very important in gas for
domestic power as it develops the gas and
monetizes it for foreign earnings. Mr. Brown
reiterated that Nigeria as a nation cannot continue
to flare gas or reinject gas without providing
enough for the local market. ''We must be able to
build domestic gas infrastructure and stop
importing generators (over 50million currently in
the country) and diesel, at the most expensive
prices in the world.'’
Host communities are dependent and therefore
are shared stakeholders, hence, they must be
provided with employment, education,
healthcare, local capacity building and a future to
look forward to, in the midst of their fast-growing
population.
Mr. Brown added that: Nigeria must also refine her
products in-country to add value, and this is
evident by efforts from IPPG members, such as
Dangote Refinery who are building refineries incountry.
Seplat's Assets Acquisition
In the oil business, Seplat has a rich portfolio of
producing oil and gas assets; it currently has 7
onshore oil blocks in the Niger Delta, with its first
acquisitions located in the western part (OML 4,
38 and 41), bought in 2010. OML 56 was acquired
in 2013 after it was pilfered from the first
acquisitions, OML 53 and 55 bought from
Chevron in 2014, but not paid for till 2016 after a
long legal battle. In 2019, Seplat acquired Eland
Oil and Gas off the London Stock Exchange (LSE)
and brought it back to Nigeria. Seplat's ownership
give birth to the OML 40 asset and a total of over
217 million barrels of oil.
For the gas business, at Oben which Seplat has
been developing heavily, it has over 465MMscf/d
of gas processing; upgrading Sapele gas plant to
produce over 85 MMscf/d and the Anoh gas plant
will start a potential 300 MMscf/d production by
mid-2023.
Seplat Has Built a Strong Profile
Seplat raised $535million in equity at its IPO
(Initial Public Offer) in 2014 and encourages the
industry group to come to the Nigerian Stock
Exchange at least and the international exchange
in the future. Seplat has given back nearly all
Seplat Has Built a Robust and Resilient
Business
Seplat values oil, gas and condensate, or a 'mix'
of them all, which is very important as the
company has established a growing gas
business. This is different from what obtained in
2010 when the company purchased gas assets
and had challenges due to the price of gas. Seplat
has become a local champion with a solid
operating track record, and positive cash flow.
The company runs a resilient business model
driven by low production costs. Seplat has shown
financial discipline through its financial policy
designed to mitigate industry cyclicality.
Seplat's Contribution to Government and
Communities
Seplat in Nigeria focuses strongly on
indigenization. It ensures that local contractors
are from the catchment states, spending almost
$1billion in wages and benefits.
Seplat's Social Impact
In the area of eye care, education and
empowerment, these critical sectors are very
close to the company's heart, having carried out
over 80,000 eye disease treatments, provided
over 4,000 scholarships and empowering over
2,000 beneficiaries.
Acquisition Best Practices
Seplat believes in six best practices that have
worked for the company, they include:
i. In-depth due diligence through
technical, commercial and regulatory
processes.
ii. Utilizing a robust financing model by
being realistic with regards to the rigs to
bring on-board, CAPEX to expand or
fund projects and knowing how to avoid
paying too much for an asset and being
left with no funds to develop it.
iii. Maximizing the values of partnerships
iv.
and risk sharing.
Capitalizing on the strength of an
experienced team of over 500 personnel
(98% of whom are Nigerians), provides
an experienced pool from where strong
teams can be recruited when necessary.
v. Seplat has a middle management with a
voice, which is listened to, as any
company looking to survive on the long-
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