A remarkable journey
Having co-founded Seplat with A.B.C. Orjiako (current Chairman of the Board) in 2009, Austin Avuru is retiring from his role as CEO and executive director on 31 July 2020. Under his leadership Seplat has grown to become the leading Nigerian independent oil and gas company and to date the only Nigerian company to be fully listed on both the Nigeria and London stock exchanges.
His unwavering dedication has been a driving force behind the Company’s achievements in not only operational and financial performance, but also its over-riding commitment to deliver value to all stakeholders. In recognition of Austin’s contribution and leadership, we look back at some of the challenges and accomplishments from a remarkable journey that will continue to impact positively on our short and long term goals.
In just a year of operations more than doubled daily liquids production from OMLs 4, 38 & 41 to over 30,000 bopd.
Completed the acquisition of 40% participating interest in Umuseti/Igbuku
Landmark IPO; the first ever London and Lagos dual listing and the first upstream E&P company to list on the Nigerian Stock Exchange. The IPO raised US$535 million and valued the business at US$1.9 billion.
In response to the lower oil price environment, Seplat adopted a prudent approach to align capex with cash flow and reduce costs to ensure a robust capital structure was maintained.
In addition to the low oil price, in 2016 Seplat had to contend with the force majeure at its principal oil export route – the Forcados terminal. Completed upgrades to two jetties at the Warri refinery to sustain exports of 30,000 bopd.
Force majeure at the Forcados terminal was lifted in June allowing Seplat to return to full productivity in the second half and emerge from a difficult chapter in its history a fitter and stronger business.
Successfully completed a debut bond issuance of US$350 million, a strong endorsement of the quality of Seplat’s underlying asset base
FID was taken for ANOH, which will position Seplat as Nigeria’s largest supplier of processed gas to the domestic market.
Completed the GBP382 million acquisition of Eland Oil and Gas, the first public market acquisition of a London Stock Exchange listed company by a Nigerian company.
Underpinned by a material production base
FY 2019 profit before tax
Gas revenues at record levels
FY 2019 profit after tax
Strong cash flow from operations
Low unit production opex
Capital investments scaled up
Net WI domestic gas market supply
Who we are
Seplat is the leading independent oil and natural gas producer in the prolific Niger Delta area of Nigeria and a leading supplier of processed natural gas to the domestic market.
Our portfolio comprises direct interests in seven blocks in the Niger Delta area, four of which Seplat operates, and one further revenue interest. Since acquiring our first blocks in 2010, we have consistently grown oil production capacity, primarily through the drilling of new oil wells and employing advanced and proven technologies to increase production in mature fields. We have also invested to increase gas production and capitalise on the rapidly growing demand and improving economics for gas in the domestic market.
Focused and dominant consolidator in the Nigerian E&P space
In 2010 Seplat became the first Nigerian independent E&P to acquire a substantial package of production and development assets from an IOC. In 2019 Seplat became the first Nigerian company to complete the corporate acquisition of a UK listed company through its recommended offer for Eland Oil and Gas PLC. The acquisition is a complementary extension of Seplat’s footprint in the western Niger Delta and delivers immediate production and cash flow, adds depth to our inventory of drilling opportunities and offers scope to capitalise on operational synergies.
Natural gas development
ANOH Gas Hub – The blueprint for Nigeria's future
The ANOH gas development at OML 53 will drive the next phase of growth for the gas business. Seplat’s involvement positions it at the heart of one of the largest greenfield gas and condensate developments in the Niger Delta, and positions the Company to be the leading long-term gas supplier of choice for Nigeria.
Seplat is well positioned to leverage the experience gained at the Oben gas processing hub, where it expanded gas processing capacity over two phases from 150 MMscfd to 465 MMscfd, to incorporate operational and cost efficiencies. Seplat took the Final Investment Decision (“FID”) to proceed with the ANOH project in March 2019 and first gas is targeted for 2021.
Positioned for a new growth phase
I believe that in future years we will look back on 2019 as a turning point for Seplat, not least as a result of two major decisions we took that will help drive the future growth of the business. We reached FID on the ANOH gas development project and completed the acquisition of Eland Oil and Gas.
These decisions are expected to add significant scale to the business and, alongside the strong performance of our existing assets, establish Seplat as the pre-eminent independent E&P operating in Nigeria today.
The Seplat journey began a decade ago, when I became the CEO. Although a period of global political and economic volatility, we chose to focus our efforts on what we could control, remaining stubbornly resilient through various headwinds. I am proud of what we have achieved, not only our operational and financial accomplishments but also in our commitment to delivering for all of our stakeholders.
Firmly established core business with strong growth prospects
I would describe 2019 as a solid year in which the robust fundamentals of the business once again kept us on an extremely solid footing. The strong cash generation we realised from our low-cost production base meant that our capital expenditures, debt service obligation and dividend distributions to shareholders were more than covered by cash generated from operations by a comfortable margin. It was disappointing that we had to revise production guidance downwards once it became apparent that unforeseen rig delays and availability constraints deferred the impact of planned production drilling activities. We also took the opportunity to undertake greater levels of maintenance and asset integrity work for the longer-term benefit of the assets. However, we rapidly regained momentum in the run in to the end of the year when we had four rigs simultaneously operating which sets us in good stead for 2020. Operating conditions in the Niger Delta were relatively stable and infrastructure uptime was excellent in the year when we benefitted from uptime of 92% on export infrastructure.
Transforming the Nigerian economy
The Energy, Utilities and Resources sector has long been centre stage of the Nigerian economy and must take some very difficult decisions to solve the structural problems for a sustainable transformation.
The opportunities for transformation to a sustainable energy future in Nigeria are vast, driven by industrialisation, digitisation and changing expectations of customers.
Renewable energy and natural gas will be the largest contributors to global electricity generation by 20403
The African continent has huge renewable energy potential and abundant natural gas (Nigeria holds 37% of total proved gas reserves on the continent) that together can deliver stable and sustainable electricity generation. There needs to be a stronger focus on the use of natural gas in the generation of electricity both at the utility and independent generation level (displacing diesel that is the most common used fuel).
- 3. IEA World Energy Outlook 2019
Download the full Seplat Annual Report 2019 or simply choose from the individual sections. For further information visit our website www.seplatpetroleum.com