Seplat Petroleum Development Company Plc has announced plans to increase exports through the Warri jetty to a gross average level of 30,000 barrel per day.The company, which recorded significant increase in gas revenue to $105.5 million…..
Seplat Petroleum Development Company Plc has announced plans to increase exports through the Warri jetty to a gross average level of 30,000 barrel per day.The company, which recorded significant increase in gas revenue to $105.5 million compared to $76.9 million, said it would continue to prioritise expansion of its domestic natural gas business. This provides a revenue stream that is de-linked from the oil price, and underpinned by the strong fundamentals of high demand and increasing pricing
Addressing shareholders during the company’s yearly general meeting in Lagos at the weekend, its Chief Executive Officer, Austin Avuru, explained that force majeure at the Forcados Terminal has materially affected its oil production, adding that it has also reflected on the 2016 full year result.
According to him, the company has established a longer term alternative export route through the Warri refinery jetty and are nearing completion of upgrade works to the infrastructure. This would enable a doubling of barging volumes to a steady 30,000 barrels of oil equivalent daily (bopd) gross for second quarter of 2017.
Furthermore, Avuru told shareholders that Seplat is currently collaborating and supporting government on the completion of the Amukpe to Escravos pipeline that would offer a third export route through the Escravos terminal.
He added that the multiple export routes expected to be operational during the second half of 2017, would significantly de-risk the firm’s route to the market. Reviewing its performance, he said: “Gross profit for the year was $72 million, a decrease of 71 per cent on the prior year (2015: $249 million). This principally reflects the shut-in of the Forcados terminal resulting in lower production, lower oil price realisation and higher costs associated with the alternative export route to the Warri Refinery.
“Operating loss for the year was $158 million when compared with a prior year operating profit of $158 million. Included in the loss is a charge of $101 million relating to unrealised foreign exchange losses principally on amounts owed by our joint venture partner NPDC.
“Whilst the quality of our asset base remains undiminished we will continue to maintain strict financial discipline to ensure that we preserve a sufficient liquidity buffer in the current environment and at the same time discretion over spend in our portfolio of production opportunities.”
He added that eliminating the outstanding National Petroleum Development Company (NPDC) receivables balance remains its absolute priority.The Chairman of the company, Dr Ambrose Orjiakor, noted that the firm’s export diversity plan and increase gas capacity would enable it operate without infrastructure disruptions.
“With the diversity of export solutions in place and our increasing gas processing capacity, Seplat has the potentials to deliver material production upside with less risk of significant constraints from any infrastructure disruption.”