Seplat Energy’s Quest for Cleaner Energy, Environmentally Friendly Operations

Seplat Energy Plc is spearheading Nigeria’s energy transition towards cleaner energy and environmentally friendly operations with millions of dollars investments, writes Dike Onwuamaeze

The Seplat Energy Plc is primed to lead Nigeria’s energy transition towards accessible cleaner and more reliable energy. The company is currently implementing an aggressive programme that is geared towards eliminating gas flares by 2025 as a significant part of its commitment to achieving net zero gas flares by 2050.
It is also exploring the use  of solar power where it is feasible and initiated a diesel replacement programme in favour of gas, a less carbon-intensive fuel, for power generation in its operations.
Seplat Energy is also supporting its decarbonisation efforts with substantial financial resources. In 2023, it allocated $5.7 million towards projects that would contribute to ending routine flares in its operations. This includes installing gas compression facilities and incineration at various flow stations among other projects.

Upon completion, these projects are expected to significantly improve its gas handling capacity and reduce flares, thus monetising flare gas in alignment with its corporate strategy and national initiatives.
In line with its strategy to lead in energy transition, Seplat has assessed various midstream gas, power, and renewable investment opportunities that are focused on increasing energy supply and reliability, lowering costs, and reducing carbon intensity of Nigeria’s electricity consumption.
In view of this, it has upgraded a gas-to-power development project, which should be matured during 2024 and presented to its board for approval.
In addition, following the completion of internal due diligence, Seplat is reviewing two other potential acquisition opportunities in the Compressed Natural Gas (CNG) and Renewable Power Generation markets.

Speaking at the company’s recent Annual General Meeting (AGM), the  Chairman of the Board of Seplat Energy, Senator Udoma Udo Udoma, said that the company’s vision would continue to remain the model company on excellence and respectability that would inspire other Nigerian companies to achieve the highest levels of success on the global business stage.
Udoma also emphasised that the company would remain committed to pursuing strategic aims in the most sustainable way possible for the benefit of all stakeholders and shareholders.

He said: “These are truly exciting times for us as in the coming months we intend to commence production from our joint venture ANOH Gas Processing Company and, we hope to complete our transformative acquisition of Mobil Producing Nigeria Unlimited (MPNU), which will diversify the business into offshore operations for the first time.
“We have been able to take on this acquisition alongside other strategic business decisions due to our focus on high standards of safety, responsible stewardship of Nigeria’s assets, excellence in operations, improvements in corporate governance, and consistent strengthening of our finances.
“As the new board chairman, I intend to continue driving the board in ensuring the organisation’s commitment to operating to the highest standards of governance and management.
“I am optimistic that by maintaining these standards, Seplat Energy will be able to continue offering very attractive returns to shareholders.”

Commenting on the proposed acquisition of MPNU started about two years ago, Udoma said that the board remained confident that the transaction would be approved, and all associated legal issues resolved.
He said: “We will continue to work with all parties to achieve a successful outcome, including our financiers, who remain supportive. We have been encouraged by the continued efforts of President Ahmed Bola Tinubu’s administration to drive positive change in Nigeria and a more supportive environment for businesses that want to invest and grow in the country.

“We hope to complete our acquisition of the entire share capital of MPNU and integrate its business with ours, welcoming its highly skilled and experienced staff to the Seplat family. I am confident that the larger group we become will be synonymous with excellence in Nigeria, reflecting the boundless energy and limitless potential of its people.”
Explaining further, the Managing Director of Seplat Energy, Mr. Roger Brown, said that the ANOH gas plant achieved mechanical completion on December 29, 2023, without recording any Lost Time Incident (LTI).  
Brown added that current activity on the ANOH gas project involves moving all key work streams to completion ahead of the first gas, planned for  third quarter of (Q3) 2024.

He said: “All upstream wells required for first gas were completed by the operator, SPDC, in 2023, with well deliverability tests conducted in  first quarter (Q1) 2024. Work is ongoing to connect the wells to the gas plant.
“Our government partner, NNPC Gas Infrastructure Company (NGIC), is responsible for delivering the pipelines required to transport the gas from ANOH to the demand centres, including the 23km spur line and the Obiafu-Obrikom-Oben (OB3) pipeline.
“With respect to the OB3 pipeline, routing of the unconsolidated formation along the tunnelling pathway on the River Niger has been completed, and our government partners announced that tunnelling operations are ongoing. Our partners recently reaffirmed their guidance for the completion of construction of the OB3 pipeline in second quarter ( Q2) of  2024.

“Regarding the Spur Line project, the operations in Imo State are witnessing improved progress following the engagement of additional contractors to expedite the completion of the remaining pipeline sections. NGIC is advising an expected completion date of the end of Q2 2024.
“The project has achieved several notable milestones in recent months, providing greater assurance that the project is on track to achieve first gas as estimated by Seplat in Q3 2024. Upon commencement of operations, ANOH will provide two income streams to Seplat.
“The first is through the sales of wet gas from upstream to AGPC. The ANOH gas plant has a design capacity of 300mmscf/d.
“As a 50 per cent owner in the AGPC incorporated joint venture, Seplat will receive dividends from the AGPC’s profits. As previously reported, we anticipate a six-month ramp-up to plateau production after the first gas, during which period AGPC will establish plant stability and off take performance. The dividends are expected to begin approximately 12-18 months after first gas.”

Going Forward
Brown  believes that the year 2024 holds out much prospect for Seplat Energy as its production has recorded improved stability in the past year.
He said: “In 2024, we expect this to continue. Our 2024 capex programme aims to maintain production, and we provided initial guidance at 44 – 52 kboepd with Q1 2024 average production was 49kboepd.
“The guidance assumes the availability of the Trans-Niger Pipeline (TNP) from the end of 3Q 2024. It also assumes the first gas on ANOH in line with guidance, and a gradual ramp-up of contribution from the gas field through the end of the year.
“Capital expenditure for 2024 is expected to be in the range of $170-$200 million. The programme includes drilling 13 new wells across our operated and non-operated assets, as follows: OMLs 4, 38 & 41 – nine wells (seven oil wells, two gas wells); OML 40 – four oil wells (including two wells in Abiala).
“The 2024 drilling program will address normal production decline and, along with the completion of maintenance activities, support long-term production levels from the assets.

“Our key focus areas and expenditure on the facility and project deliverables include the completion of the ANOH Gas Processing Plant inauguration  and commencement of operations; Completion of the Sapele Gas Plant; and Installation of Abiala surface production facilities.
“Additionally, we are committed to exploring and developing new business opportunities, especially along our New Energy business, fostering growth and diversification within our portfolio. Finally, a significant priority for the business will be the elimination of routine gas flares through the delivery of Oben, Amukpe, Sapele, and Ohaji flares out projects, aligning with our commitment to environmental sustainability and regulatory compliance.
“These deliverables underscore our dedication to innovation, sustainability, and value creation across all operations. We recognise the importance of the sustainability of our evacuation options and strive to bolster security measures along our evacuation routes to safeguard our operations. These initiatives are also geared towards maximising the volume of oil sales and revenue for the company, highlighting our commitment to operational efficiency and financial sustainability.”

In addition, the company’s Environmental, Social, and Governance (ESG) performance and 2024 targets reflected the company’s heightened emphasis on ESG measurement and reporting.  
Moreover, Seplat Energy was one of the early adopters of the IFRS S1 & S2 Disclosure Standards and commenced reporting in alignment with these standards from the 2023 annual report.

2023 Financial Year
There is no doubt that the year 2023 was a very good one  for Seplat Energy in terms of growth as the company delivered a strong set of results, against a weaker oil price environment.
Despite the 17.0 per cent decline in the average price of Brent crude, the company grew its oil and gas revenue by 11.5 per cent to $1.061 billion, thus crossing the $1.0 billion mark for the first time.  
The company also increased its average daily production by 8.3 per to 47,758 boepd (barrels of oil equivalent per day) in 2023, from 44,104 boepd in 2022. Similarly, revenue from oil and gas sales for 2023 rose by 11.5 per cent to $1.061 billion from $952 million in 2022. This excluded the reported $98.9 million over lift.

Rewarding Shareholders
For the fiscal year 2023, the board recommended a total dividend of the United States’ (US) 15 cents per share to shareholders. This decision was influenced by various considerations, as the company has a solid financial plan that assures it can operate effectively.
In the words of Chief Financial Officer of Seplat, Mr. Eleanor Adaralegbe, “the board of Seplat Energy recommended a special dividend of three cents per share for the 2023 business year aside from the core dividend of 12 cents per share, up 20 per cent on 2022.

“The payment of the special dividend reflects the board’s continued confidence in the future of the business and is underpinned by a strong balance sheet.
“Our financial strategy ensures we can appropriately fund our capital expenditures, meet necessary debt repayments, and return cash to our shareholders. It also provides the flexibility required to realise the value of our asset base.
“We have a Naira revenue stream that largely matches our significant Naira cost base, and we will continue to monitor our exposure over the coming months to effectively manage the impacts of any currency fluctuations as they occur.”

Safety Culture
Seplat Energy again demonstrated its strong safety culture in the year under review without any LTI. This achievement reflected the company’s strong focus on safety and the dedication of its workforce to maintaining a secure work environment. To date, the company has achieved a cumulative 10.6 million man hours since the last LTI recorded in October 2022.

Explaining further, Chief Operating Officer of Seplat Energy, Mr. Samson Ezugworie said: “Safety remains Seplat Energy’s top priority.
Several training sessions on Incident Management, Process Safety Management Training for Operations, Engineering, Maintenance, Wells, and HSE Team members were conducted over the past year to ensure all teams are updated on the latest safety procedures. The company is also on a path to achieving ISO 45001 and 14001 standards certifications, demonstrating its commitment to top-tier safety and environmental performance. These certifications are globally acknowledged benchmarks for occupational health and safety management systems and environmental management systems, respectively.”

Commitment to Host Communities
Seplat Energy recognises the importance of its relationship with the communities in which it operates and is committed to contributing to the growth and development of these communities.
It has several initiatives in place to support communities, including health, and educational programs. The company also engages in continuous dialogue with community members starting from project initiation and throughout the operation and decommissioning phases.
Ezugworie said: “As a sustainable company, Seplat Energy remains dedicated to contributing to the growth and development of our people and communities. We believe that the sustainability of our business is dependent on the relationships we forge with the communities in which we operate and the contribution we make to them.

“We have successfully attained the ISO 26000 endorsement, which underscores our adherence to internationally recognised sustainable and ethical business practices standards.
“In 2023, we made substantial progress by installing solar panels and granting 100 per cent renewable energy access to five schools and three hospitals, advancing our goal of increasing energy access while enhancing our capabilities in the power and renewable energy sectors.
“In 2024, we plan to provide additional community hospitals, schools, and households with reliable and renewable power. We executed successful direct intervention programs in health and education as well in our communities, and these initiatives underscore our commitment to social responsibility and creating long-term value for all stakeholders.”

Related Articles