Seplat, a prominent player in the Nigerian oil and gas sector, is poised for significant growth, aiming to double its crude oil production capacity within the next six months. This ambitious target follows Seplat’s strategic acquisition of ExxonMobil’s onshore oil and gas assets in Nigeria, a transaction that has reshaped the landscape of the Nigerian energy industry. The $1.28 billion deal, finalized in December after a protracted approval process, grants Seplat ownership of a substantial portfolio, including 11 onshore oil blocks, numerous oil and gas fields, export terminals, and gas processing facilities. This acquisition positions Seplat as a major domestic producer, holding 16% of Nigeria’s current production capacity.
The company’s growth strategy hinges on revitalizing the acquired assets, which have experienced limited investment in recent years. Seplat’s Chief Financial Officer, Eleanor Adaralegbe, expressed confidence in the potential for significant production increases, citing the opportunity to optimize and expand operations. The company plans to leverage its expertise and resources to unlock the untapped potential of these assets, aiming to boost output from approximately 50,000 barrels per day (bpd) to an impressive 120,000 bpd. This ambitious goal demonstrates Seplat’s commitment to playing a pivotal role in Nigeria’s energy sector.
Seplat’s leadership team, including Chief Executive Roger Brown and Chief Operating Officer Samson Ezugworie, have articulated a clear vision for the company’s future. They emphasize a collaborative approach with the Nigerian National Petroleum Company (NNPC), acknowledging the legal framework mandating joint operations in the country’s oil and gas industry. This partnership with NNPC, aligned with the production-focused agenda of President Bola Tinubu, is seen as crucial for achieving Seplat’s growth objectives. The company believes that increased oil production will not only benefit Seplat but also contribute significantly to Nigeria’s economy by generating much-needed foreign exchange and bolstering the national currency.
A key element of Seplat’s strategy involves reactivating a significant number of idle wells within the acquired assets. With over 600 drilled wells, of which only about 200 are currently producing, Seplat recognizes the substantial untapped potential. The company plans to invest in rejuvenating these idle wells and bringing them back online swiftly, thereby accelerating production growth. This approach reflects Seplat’s focus on efficient resource utilization and maximizing output from existing infrastructure.
Seplat’s acquisition of ExxonMobil’s assets comes at a time when several international oil companies are divesting from Nigeria’s onshore and shallow water sector. This trend is driven by a combination of factors, including long-standing environmental challenges and declining production levels. The exit of major players like Eni, Equinor, and Adda Petroleum creates an opportunity for domestic companies like Seplat to step in and fill the void. Seplat’s bold move to acquire ExxonMobil’s assets signals its confidence in the Nigerian oil and gas sector and its willingness to invest in its future.
Seplat’s ambitious growth plan represents a significant development in the Nigerian energy landscape. By doubling its production capacity, Seplat aims to become a leading force in the domestic oil and gas sector. The company’s strategy of revitalizing existing assets, coupled with its collaborative approach with NNPC and alignment with the government’s production goals, positions it for success. Seplat’s commitment to investing in Nigeria’s oil and gas sector offers a counter-narrative to the trend of international companies exiting the market, signaling a potential resurgence in domestic production and contributing to the country’s economic growth. This move also underscores the evolving dynamics of the global energy landscape, where domestic players are increasingly taking on more prominent roles.
