By Nse Anthony-Uko
ABUJA, (Sundiata Finance) — The Chief Executive Officer, Seplat Petroleum Development Company Plc, Mr. Austin Avuru said the indigenous oil and gas exploration and production company, gas business in 2016 exceeded the $100 million revenue milestone demonstrating its robustness and providing a solid base from which to grow.
The CEO of Seplat at the company’s 4th Annual General Meeting (AGM) in Lagos, on Thursday said the company’s asset base remained undiminished despite the difficult operating environment of 2016.
He said, “in addition to a difficult global oil market backdrop, our business has had to contend with unprecedented operational challenges due to interruptions and these are reflected in our full year results.
“While force majeure at the forcados terminal has materially affected our oil production, I am particularly pleased to see the growth in our gas business which in 2016 exceeded the $100 million revenue milestone demonstrating its robustness and providing a solid base from which to grow. It is easy to forget that in 2013 gas revenue were only $18 million, which shows how far we have come.”
Seplat Petroleum Development gas revenue increased significantly year on year to $105.5 million compared to $76.9 million that was recorded same period in 2015. He noted that this trend was driven by a 19 per cent increase in the average realized gas price to $3.03/Mscf compared to $2.55/Mscf in 2015, which shows an increase of 11 per cent in working interest production to 95 MMscfd (34.7Bscf) compared to 86 MMscfd (31.3Bscf) in 2015.
The company which faced a challenging operating environment in 2016 acknowledge the impact on its revenue due to the extended Trans Forcados shut in as well as volatility in global oil prices. Avuru explained, that they have established a longer term alternative export route through the Warri refinery jetty and are nearing completion of upgrade works to the infrastructure enabling a doubling of barging volumes to a steady 30,000 bopd gross for second quarter of 2017.
Adding that, “alongside this, we are collaborating and supporting government on completion of the Amukpe to Escravos pipeline that will offer a third export route through the Escravos terminal. With multiple export routes expected to be operational during the second half of 2017, we will have significantly de-risked our route to market”.
To significantly improve its alternative routes and avoid revenue losses from shut-ins, Avuru pointed out that they are also, in addition to the Warri and Forcados export routes, supporting the National Petroleum Investment Management Services (NAPIMS) a 100 percent subsidiary of the Nigerian National Petroleum Corporation (NNPC), he said on completion of the 160,000 bopd capacity Amukpe to Escravos pipeline that will offer a third export route through the Escravos terminal. With the intention is to utilize all three to ensure there is adequate redundancy in evacuation routes.
Going forward, he empathized that “the company has said it will set full year production guidance at the lifting of the force majeour by Shell, but the immediate priority is to increase exports via the Warri refinery jetty to a gross average level of 30,000 bopd and looking further ahead support NAPIMS to achieve completion of the new Amukpe to Escravos pipline”.
He said “Seplat will continue to prioritized expansion of its domestic natural gas business which provides a revenue stream that is de-linked from the oil price and underpinned by the strong fundamentals of high demand and increasing pricing. Eliminating the outstanding NPDC receivables balance remains an absolute priority “.