Seplat CEO Says Stable, Transparent Environment Will Halt IOCs’ Exit
The Chief Executive Officer, Seplat Energy Plc, Roger Brown, has said environment of transparent and stable. investment landscape will stop divestment of International Oil Companies (IOC) from Nigeria.
Brown spoke at the Nigerian Association of Petroleum Explorationists (NAPE) Divestment Workshop held in Lagos on Thursday.
Speaking on the theme, “The Big Sale: Opportunities in the Nigerian Oil & Gas Industry from Asset Divestments” which had industry players, regulators, government, financiers, oil servicing companies, sector analysts and the media, amongst others, said indigenous energy companies with the right competences and wherewithal are natural partners to government in the quest to harness oil and gas assets, in the era of divestments by the International Oil companies IOCs from Nigeria.
In his sponsorship presentation dubbed “Our Divestment Opportunities Journey, Lessons Learned, Best Practices and the Success Stories … What’s Next Post-Divestment – Vision 2030”, Brown said the IOCs will continue to exit onshore and shallow water terrain of the Niger Delta, noting that the move should be considered as an opportunity for indigenization, and not a negative for Nigeria.
According to him, indigenous energy companies have a Nigeria investment appetite, and are not looking to leave the country, adding that they understand the country risk well and have a more practical approach to macro events with long term investment horizon.
He noted that Nigeria accounts for 1 per cent of world daily oil production, but 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.
“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.”
Brown stated that the greatest business opportunity ahead 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).
Going memory lane, Brown said Seplat Energy 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 said 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.
Speaking on 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, Brown maintained that crude oil theft on exportsuccessfullynes should be dramatically reduced/eliminated; cash call payment should be made in advance of spending; the gas market should be fully market-driven – willing buyer and willing seller scenario; there should be spending action of 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 financial institutions, would be willing to lend to Nigerian businesses, adding that there is the need for expansion of African banks alongside African development banks.
Also present at the workshop was:d James Ethe the diet, NAPE President; Gbenga Komolafe, Chief Executive Officer, Nigerian Upstream Petroleum Regulatory Commission (NUPRC) represe;d by Abel Nsa of the Commission; Austin Avuru, FNAPE, Executive Chairman, AA Holdings; George Osahon, FNAPE, Chairman Energia; Chike Nwosu, Chief Executive Office, Waltersmith Petroman Oil limited; Ireti Samuel- Ogbu, Managing Director Citibank Nigeria Limited; Dr Layi Fatona, FNAPE, former Managing Director ND Western; Ebi Omatsola, Non- Executive Director, Conoil Plc, Drong others.
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