Seplat loses $61m as Forcados remains shut

Austin Avuru*Production down by 21%

Kunle Kalejaye

29 July 2016, Sweetcrude, Lagos — Seplat, an independent indigenous Nigerian oil exploration, and production company posted an after-tax lose of $61 million sequel to the shut-in and suspension of oil export at the Forcados terminal.

In mid-February 2016, militants in Nigeria’s oil-rich region, Niger Delta blew up pipeline feeding the Forcados export terminal, leading to loss of at least 250,000 barrels of crude oil per day.

The loss is compared with an after-tax profit of N41.48 million in a similar period last year when the company generated $247.59 million in the first quarter of 2015.

Meanwhile, Seplat revenues for the half-year end on June 30, 2016, declined by 42 percent year-on-year to $143.02 million due to the disruption of oil export at the Forcados terminal.

Within the same period, Seplat’s average working interest production fell by 21 percent to 25,695 barrels of oil per day compared with 32,580 in 2015 while gas production rose 59 percent year-on-year to 85 standard cubic feet per day (MMscf/d) in gas.

Seplat’s CEO Mr. Austin Avuru said “The shut-in and suspension of oil exports at the Forcados terminal since mid-February means we have faced significant challenges in the first half of the year.

“However, our underlying fundamentals remain strong and we continue to invest in growing our gas business at a rapid rate.”

Avuru explained that the Phase II expansion of its Oben gas processing plant in Edo State remains on track, with the arrival of processing modules into the country noting that installation and commissioning of the modules are expected to take place by year-end.

The expanded Oben gas plant according to Avuru is expected to increase the company’s gross processing capacity from the current 300 MMscf/d to a minimum of 525MMscf/d by year-end. “With this gas production capacity, Seplat will be able to supply gas to meet a third of Nigeria’s power generation needs,” Avuru said.

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