Seplat to Increase Investment in Gas Business to Boost Revenue

The Chairman of Seplat Petroleum Development Company Plc, ABC Orjiako has said the company would put more investment in its gas business in 2018 so as to boost revenue and deliver more returns to investors.

Seplat, which is a leading Nigerian independent oil and gas exploration and production, made a capital investment of $33 million in 2017. Speaking at a post- annual general meeting (AGM) media briefing in Lagos, yesterday, Orjiako said the company would increase capital investment in the current year.

According to him, most of the investments would be in gas business, which he said contributed about 27 per cent of its revenue in 2017.

“Our strategy to diversify and grow our sources of income through the expansion of our gas business continues to gain momentum. Since the government launched various initiatives to stimulate investment in the gas sector, including opening the Domestic Supply Obligation (‘DSO’) price to commercial market forces, Seplat has been at the forefront of gas commercialisation and made substantial investments in support of the government’s energy agenda,” he said.

He disclosed that company’s gas revenue has grown from $18 million in 2013 to a record $124 million in 2017, a sevenfold increase in four years.

“We are justifiably proud of this and at the same time we see tremendous potential headroom for further growth,” he declared.

Seplat returned to profitability in 2017, recording a profit after tax (PAT) of

N81.11 billion, compared with a loss of N45.4 billion in 2016.

Commenting on the return to profitability, Orjiako said: “I am pleased to report that in 2017 we made good progress as we reviewed our vision, mission and strategy towards refocusing the company on our key priorities: to de-risk future cash flows through diversification of oil export routes; invest in and scale up our domestic gas business; maintain a liquidity buffer while continuing to reduce debt; keep tight financial control with discretion in spending; and position Seplat with a stabilised platform for sustainable growth even in a harsh operating environment.”

Also speaking on the performance, Chief Executive Officer of Seplat, Austin Avuru said: “I am pleased to report that Seplat made a return to full-year profitability in 2017, registered strong cash flow performance and significantly strengthened the balance sheet. In a year of contrast, we were plagued throughout most of the first half by force majeure at the Forcados terminal… Our proactive and decisive management coupled with the strong underlying fundamentals of the business have seen us emerge from an exceptionally challenging period a much fitter and stronger business that is well equipped to deliver long-term value for our shareholders.”