Seplat Petroleum - Annual Report and Accounts 2020

Powering Nigeria's energy transition

2020 highlights

Production within guidance, strong profitability, cash flow & balance sheet

Group production within guidance

51,183 boepd

Liquids contribution from Eland

8,855 bopd

Gas for Nigeria's domestic market

101 MMscfd

Revenues impacted by Covid-19

$530.5 m

Unit cost per boe including Eland assets


Loss before tax, after non-cash impairments

$80.2 m

Capital investment increased

$150.1 m

Cash at bank after $100m voluntary loan repayment

$258.7 m

Net debt steady

$440 m

Dividend per share maintained


At a glance: Nigeria's energy leader

Seplat is Nigeria’s leading indigenous, independent oil and gas producer, with a working interest production of nearly 34,000 barrels a day of liquids for export and 101MMscfd of processed natural gas used for domestic power generation.

Operating portfolio

Seplat’s operating portfolio comprises seven oil and gas blocks in the prolific Niger Delta region of Nigeria, which we operate with partners including the Nigerian Government and other oil producers. We have a revenue interest in OML 55. We have a 465MMscfd gas processing plant at Oben, in OML4, we are upgrading our Sapele Gas Plant in OML 41 to 75MMscfd, and are building the 300MMscfd ANOH Gas Processing Plant in OML53.

Seplat’s oil generated foreign currency income of $380 million for Nigeria in 2020. On this, we paid $72.7 million royalties and a further $107 million in taxes and levies. These contributions support Nigeria’s economy, including its healthcare and educational systems and its creation of essential infrastructure.

At times, our gas powered up to 30% of Nigeria’s domestic grid in 2020 and by increasing gas production we can help to reduce Nigeria’s dependence on small-scale, costly and polluting generators. In addition, we spent $14.7 million supporting our host communities, focusing on jobs and business opportunities, security, medical and other assistance during the pandemic.

Gas (Production/2P reserves)

Seplat’s gas business consists of gas fields and associated infrastructure in OML 4, which supports our Oben Gas Processing Plant, and OML 53, where our independent joint venture ANOH Gas Processing Company is building a 300MMscfd gas processing plant. The ANOH plant is considered one of Nigeria’s most important strategic energy projects and will help Nigeria’s transition away from small-scale domestic and business generation. It is expected to produce first gas in 2022.

Oil (Production/2P reserves)

Seplat's oil portfolio was strengthened by the acquisition of Eland Oil and Gas Ltd, in December 2019, along with its interests in OML 40 and the Ubima field. Together they produced 26% of Group liquids in 2020.

Coping with COVID: A robust business response to the pandemic

Seplat has delivered a robust performance despite the unprecedented crises we have experienced since March.


1 Nigeria’s response to COVID-19

Thanks to its experience in dealing with previous challenges such as Ebola, the direct impact of Covid-19 has been far less severe in Nigeria than in many other countries. In the year since March 2020 the Nigeria Centre for Disease Control has recorded approximately 160,000 cases and nearly 2,100 deaths. Now, in 2021, a year after the outbreak and with multiple vaccine options available, the threat is beginning to recede and life is returning to normal. The question for all of us is whether that pre-pandemic ‘normal’ was inherently unsustainable and what lessons should be learned from this great shock the world has experienced.


2 Oil market impact

The price of our main product suffered greatly in the pandemic as economic activity fell and local and international travel collapsed. As demand for oil fell, the crisis was exacerbated by a pricing and supply dispute between Saudi Arabia and Russia that shocked the market so badly it responded with negative pricing in April on fears that storage capacity would soon run out. As the year progressed, however, the price of oil recovered on optimistic news about vaccines. In response to the market crisis and OPEC+ decisions on supply, Seplat abided by quotas and purposefully hedged to protect our cash flows from downside shocks. We booked hedging income of $26.4 million in 2020, with $8.3 million hedging costs being recognised as fair value charges.


3 Field operations

Despite the pandemic, our fields remained in operation throughout 2020. Although the Federal Government placed restrictions on internal travel, essential industries such as ours were exempted so we could serve Nigeria’s need for exports of oil and gas for local consumption. Recognising the need to adapt our field operations for the health and wellbeing of our colleagues, we implemented essential-only staffing of field operations, based upon 28-day rotations instead of 14-day, with strict quarantines to be observed in the week before deployment. Backed by regular testing, this ensured that all our fields remained Covid-free throughout the crisis.


4 Adapting to ‘working from home’

Working from home became the new normal in 2020 as offices were shuttered and travel restrictions took hold. Thanks to our business continuity plans we were fully prepared and continued to run the business from homes offices and kitchen tables, using secure IT and remote collaboration tools for meetings. Our Annual General Meeting was a hybrid affair, broadcast live on the internet as a small audience attended in person with full regard to social distancing protocols. We introduced earnings calls at the first and third quarter results and continued our active engagement with investors by video calls and virtual investor conferences. We even held virtual parties to celebrate our 10th anniversary so we could maintain the strong sense of community we would normally experience through teamwork in the office.


5 Helping our host communities

We immediately recognised the need to help our host communities through the difficult times of Covid-19. At a national level, Seplat was one of 33 organisations that donated a combined total of $30 million to support the Federal Government’s efforts at curbing the spread of the pandemic. In addition, Seplat provided food assistance, medical and protective equipment worth ₦50 million to help local State authorities.

Chairman’s statement: Strength through experience

Our tenth year will be remembered as an extraordinary time, one full of challenge and change, not just for Seplat but for the entire global economy. The Covid-19 pandemic spread quickly across the world, forcing entire societies into lockdown, the new reality of “working from home” and serious economic downturns that naturally impacted demand for oil.

But thanks to our prudent approach to managing our Company, I am pleased to report that Seplat has emerged from this crisis in robust health and prepared for an exciting future under its new leadership.

“Our ANOH Gas Processing Plant will be a major step forward in Nigeria’s drive to reduce carbon emissions, replacing potentially millions of small-scale, inefficient, and polluting generators with cleaner utility-scale power generation fired by Nigerian natural gas.”

– Ambrosie Bryant Chukwueloka (‘A.B.C.’) Orjiako
A.B.C. Orjiako

CEO interview Planning for the future

Having survived the worst year in the history of the oil and gas industry, the actions we’ve taken before and during 2020 have left us in a position of strength and I am confident that as demand recovers and the imperative for gas increases, Seplat will exit 2021 a larger, stronger, more profitable company and strengthen its position as Nigeria’s indigenous energy leader.

“I truly feel that we have made a positive difference for our host communities and will continue to do so long into the future.”

– Roger Thompson Brown
Roger Thompson Brown

Operational review

Continuing focus on improving our efficiency


Seplat’s portfolio comprises direct interests in seven oil and gas blocks and a revenue interest in one other block. This portfolio provides the Company with a robust platform of oil and gas reserves and production capacity, together with material upside opportunities through future development.


Our oil and gas assets are located in the onshore land and swamp areas of the prolific Niger Delta in Nigeria. Principal areas of production are Edo, Delta, Imo and Rivers States.

51,183 boepd

Volume within guidance

$8.90 /boe

Cost of production

$150 m

Capital investment


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