A major Nigerian independent oil and gas exploration and production firm, Seplat Petroleum Development Company Plc, said its gas revenues increased by 37 per cent last year, even as its oil production was curtailed by the shutdown of the Forcados terminal.
The company attributed the increase in its gas volume to the new Oben gas processing facility installed mid-year 2015, with a processing capacity of 150 million standard cubic feet per day.
The Chairman, Seplat Petroleum Development Company, Dr. Ambrose Orjiako, said on the sidelines of the company’s Annual General Meeting in Lagos on Thursday that the shut-in of the Trans Forcados Pipeline, the main route for the company’s exports, impacted the volume of oil production amid low prices.
“During this period, we quickly adapted and started exporting some of our production through the Warri refinery. Another thing we did was to quickly expedite action on our gas development and commercialisation strategy, and that meant that quite a lot of revenue now came from gas,” he said.
Orjiako said the company was able to increase its gas processing capacity to over 500 million scfpd and gas production to 300 million scfpd.
The company’s gas revenues increased to $105.5m last year, compared to $76.9m in 2015, driven by a 19 per cent increase in the average realised gas price to $3.03 per 1000 scf from $2.55/mscf in 2015, and an 11 per cent increase in working interest production to 95 million scfpd from 86 mmscfd in 2015.
Seplat said the shut-in and declaration of force majeure at the Forcados terminal by the operator, Shell, saw its average daily production fall from 52,000 barrels of oil equivalent per day by mid-February 2016 to 25,877 boepd by year end.
It said oil revenue fell by 55 per cent from $570m in 2015 to $254m in 2016, while the total volume of crude lifted in the year was 3.422 million barrels compared to 8.129 million barrels in 2015.
The firm explained that the decline in its gross profit to $72m from $249m in 2015 reflected 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.
It stated that it posted an operating loss of $158m in 2016, compared to an operating profit of $158m a year earlier, adding that included in the loss was a charge of $101m relating to unrealised foreign exchange losses principally on amounts owed by its joint venture partner, the Nigerian Petroleum Development Company.
The Chief Executive Officer, Seplat, Mr. Austin Avuru, said, “While force majeure at the Forcados terminal has materially affected our oil production, I am particularly pleased to see the growth in our gas business, which in 2016 exceeded the $100m revenue milestone demonstrating its robustness and providing a solid base from which to grow.