Seplat Energy is set to breathe new life into Nigeria’s dormant oil wells following its successful acquisition of ExxonMobil’s onshore oil and gas assets. The initiative aims to significantly bolster the company’s production capacity across the region.
The company’s Chief Operating Officer, Samson Ezugworie, shared that their immediate objectives include deploying rig interventions, undertaking short-term oil production activities, and reactivating idle wells. He highlighted that only 200 of the country’s 600 oil blocks are currently active, underlining the potential for expansion.
This strategic acquisition aligns with a broader trend of multinational corporations scaling back their presence in Nigeria, the largest oil producer in Africa. In October, the Nigerian Government approved the deal, enabling Seplat to seize this opportunity for growth.
As part of the agreement, Seplat has already paid $800 million, adding to the $128 million initially paid when the deal was finalized in 2022. However, a payment of $257.5 million has been deferred until December 2025 to address costs related to decommissioning, abandonment, and joint ventures.
The company, listed on both the Lagos and London stock exchanges, views the transaction as a highly lucrative investment. Eleanor Adaralegbe, Seplat’s Chief Financial Officer, noted that the cost represents just over half of the company’s annual EBITDA, making it a swift return on investment.
For the first nine months of 2024, Seplat reported a 25% rise in EBITDA, reaching $383 million compared to the previous year. The acquisition is projected to double the firm’s output, expanding its portfolio to encompass 11 oil blocks, 48 operational fields, five gas-processing plants, and three export terminals in Nigeria.
CEO Roger Brown expressed aspirations to raise production levels to over 200,000 barrels per day, a dramatic leap from the current output of approximately 71,000 barrels of oil equivalent per day. While a specific timeline for this goal was not disclosed, Brown also emphasized the vast potential in Nigeria’s gas sector, including opportunities in LNG and domestic supply.
This ambitious initiative underscores Seplat’s commitment to strengthening its position as a leader in West Africa’s energy sector.
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