Seplat loses $61m as Forcados remains shut

Kunle Kalejaye 03 August 2016, Sweetcrude, Lagos – Seplat, an independent indigenous Nigerian upstream exploration and production company, posted a $61 million after tax loss as a result of the shut down and suspension of oil export at the Shell Nigeria-operated Forcados facilities.

Dr. A.B.C. Orjiako, Chairman, Seplat

Dr. A.B.C. Orjiako, Chairman, SeplatEarlier in February this year, militants in the oil-rich Niger Delta region blew up the pipeline feeding the Forcados export terminal, leading to a loss of at least 250,000 barrels of crude oil per day. Seplat transports its oil through the Forcados facilities.

Meanwhile, Seplat’s revenues for the half-year ended 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, the company’s 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.

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 to grow 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 525 MMscf/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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