Seplat Energy CEO Tasks FG On IOCs Divestments, Adherence To Petroleum Act

  • Says Divestment Opportunity To Indigenize Nigerian Oil Assets

Picture Caption: Roger Brown (right) at the workshop. (Source: @NAPE-Nigeria on Twitter)

Amidst the ongoing divestments from Nigeria by the International Oil companies (IOCs), the Chief Executive Officer, Seplat Energy Plc, Roger Brown, on Thursday in Lagos, called for a clear government position on the processes, while adhering strictly to existing laws, and embracing the spirit of the Petroleum Industry Act (PIA); and there should be currency stability with robust macroeconomic policy.

For the country to successfully leverage the divestment opportunities in-country, he called for a dramatic reduction and even elimination of crude oil theft on export pipelines; payment of cash call in advance of spend; just as the gas market should be fully market-driven with the emergence of a willing-buyer and willing-seller scenario.

Speaking at the Nigerian Association of Petroleum Explorationists (NAPE) Divestment Workshop themed, “The Big Sale: Opportunities in the Nigerian Oil & Gas Industry from Asset Divestments,” he said indigenous energy companies with the right competences and wherewithal are natural partners to government in the harnessing of the country’s oil and gas assets.

Brown, in his sponsorship presentation dubbed “Our Divestment Opportunities Journey, Lessons Learned, Best Practices and the Success Stories … What’s Next Post Post-Divestment – Vision 2030,” said the move should be considered as an opportunity for indigenization, and not a negative for the country, because indigenous energy companies have a Nigeria investment appetite.

The indigenous players, he continued, at the event attended by industry players, regulators, government, financiers, oil servicing companies, sector analysts and the media, amongst others, are not looking to leave the country, and that they understand the country risk well and have a more practical approach to macro events with long term investment horizon.

According to him, Nigeria accounts for a mere 1% of the world’s daily oil production, even as the potential in the sector remains vast.

“The sector players need to work together more collaboratively to ‘grow the pie’. It is a shared risk and shared prosperity scenario. We should work together to grow and monetise the nation’s resources, particularly when worldwide demand for liquids will fall – at some point,” he added.

The Seplat Energy boss further stressed that “capital will only travel to and stay in Nigeria when the investment landscape is transparent and stable. Given the uncertainties, investors struggle to value the future –there is always some event that impacts value

“Equities are extremely undervalued, foreign currency unavailability for exit is a barrier to inward investment. Debt lenders are uncomfortable if equity is scarce – don’t want to be the only solution, particularly if adverse events happen.”

The greatest business opportunity ahead, Brown noted, is to supply the right mix of energy to support Nigeria’s growth. In doing so, he said all energy companies must make a positive social impact and contribute to Nigeria’s achievement of the United Nations’ Sustainable Development Goals (SDGs).

Narrating the Seplat Energy transition story, he said the company is developing its upstream business by selectively expanding its asset base, optimising the gas/oil mix, increasing production, reducing costs and carbon intensity, and increasing revenue assurance by diversifying routes to market.

For midstream gas, he explained that the company is committed to the development of Nigeria’s gas resources to accelerate the replacement of diesel and biomass and support economic growth through the supply of reliable, low-cost energy. Gas-to-power provides baseload electricity to support renewables.

For new energy, Brown said Seplat Energy remains committed to achieving a world-class capability in renewable energies, through the development or acquisition of new skillsets that open up new and profitable markets.

In the quest for success, leveraging the divestment opportunities in-country, he maintained that crude oil theft on export pipelines should be dramatically reduced/eliminated; cash call payment should be made in advance of spend; gas market should be fully market-driven – willing buyer and willing seller scenario; there should be a clear position of the government on divestment processes with a strong adherence to existing laws whilst embracing the spirit of the Petroleum Industry Act (PIA); and there should be currency stability with robust macroeconomic policy.

He said more financing institutions should be willing to lend to Nigerian businesses, adding that there is need for the expansion of African banks alongside development banks.

Also present at the workshop were: Dr. James Edet, NAPE President; Engr. Gbenga Komolafe, Chief Executive Officer, Nigerian Upstream Petroleum Regulatory Commission (NUPRC) represented by Abel Nsa of the Commission; Austin Avuru, Executive Chairman, AA Holdings and immediate past MD of Seplat; George Osahon, Chairman Energia; Chike Nwosu, Chief Executive Officer, Waltersmith Petroman Oil limited; Mrs. Ireti Samuel-Ogbu, Managing Director, Citibank Nigeria Limited; Dr. Layi Fatona, former Managing Director ND Western; and Dr. Ebi Omatsola, Non- Executive Director, Conoil Plc, among others.

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