Seplat Petroleum Development Company Plc remains confident that the huge investments it has made in its operations will lead to significant growth and greater returns for its shareholders.
The Chief Executive Officer, Seplat, Mr. Austin Avuru, stated this in Lagos on Tuesday at the company’s first Annual General Meeting after its dual listing on the London Stock Exchange and the Nigerian Stock Exchange.
Responding to questions, Avuru explained that the company, which had invested over $300m in its operations, had made significant progress with its gas commercialisation strategy.
He said, “We are now operating in midstream by processing natural gas and crude oil development and delivery into the market. We have successfully made efforts in our gas development strategy by expansion of our gas processing facility in Oben. Seplat will take advantage of this to boost revenue from gas in 2015 and in the coming years.
“The new 150MMcfd Oben gas processing facility will take overall gross production capacity at the company’s assets up 300MMcfd in 2015 and the company intends to grow this further to at least 450 MMscfd by end 2017.”
Avuru also explained that the company had utilised its pioneer status to the benefit of all parties.
He said the pioneer status, which it enjoyed along with other companies, “was fully utilised, particularly in our gas business. We invested over $300m over this period in our gas business and invested heavily even in our oil business, which is why we quadruple production from just about 14,000 barrels per day to over 70,000 barrels”.
He added, “So, there are benefits for all parties, including government that has had to earn much higher values for royalties and our partners that have also had to earn much higher income from our increased production. We have also increased supply of gas into the domestic market and into our power sector.
“So, really, we applied because we were qualified and we were granted like others. In addition to this we utilised it in a very exemplary manner to the benefit of the economy at large and to the benefit of all our stakeholders.”
On the proposed Afren merger, he said the company looked at the issue in detail and determined that it was not in the best interest of Seplat and its shareholders to go ahead with the merger.
“Particularly because we didn’t have an opportunity to have the kind of engagement we wanted with the creditors to Afren… We thought that unless we have fruitful and full engagement with the creditors, it will not be in our interest and in the interest of shareholders to go ahead,” he said.
The Chairman, Seplat, Dr. Ambrosie Orjiako, had in his speech at the AGM told the shareholders that the future of the company was bright.
He assured them that the Board of Directors was fully committed to the protection of interests of the shareholders, “through compliance with all aspects of best practice as set out in the United Kingdom Corporate Governance Code and the Nigerian Code of Corporate Governance.”
The Chief Financial Officer, Seplat, Mr. Roger Brown, explained that the company had reacted to the slump in oil prices by going through an extensive process of cutting costs. He said for 2015 the company had a net production guidance of between 32 to 36,000 barrels per day.
