Boss of Seplat Aims to 'Unlock' Nigeria's Potential for Investors

The boss of London-listed Seplat wants to “demystify” Nigeria for international investors after completing a tortured billion-dollar deal with ExxonMobil that has turned the company into one of the nation’s largest oil producers.

Two years back, CEO Roger Brown had his visa cancelled for three months following a petition from anonymous "employees and stakeholders" who alleged he was racist during the prolonged attempt to take over Exxon's onshore oil and gas assets in Nigeria's conflict-ridden Niger Delta region.

It ultimately took almost three years and a shift in governmental leadership to finalize the deal, which concluded in December. However, Brown maintained that applying any sort of "Nigeria discount" to Seplat’s shares was unjustified.

We have substantial discounts on our share prices concerning the Nigerian factor," explained the British executive to the Financial Times. "The sole method to dispel this notion is simply... continue increasing production and maintain discussions around it.

The $1.28bn acquisition of Exxon’s business, which was completed in December, has made Seplat one of Nigeria’s biggest domestic producers with an asset base of 11 onshore oil blocks, 48 oil and gasfields, three export terminals and five gas processing facilities.

This agreement will allow for an increase in output from 50,000 barrels per day to around 120,000 barrels daily before September. At that time, Brown intends to discuss these developments with shareholders during an investor meeting in London. "Our aim is to clarify our future direction and shed light on the situation in Nigeria," he stated.

This deal has solidified Seplat's standing alongside several local Nigerian oil firms such as Oando and Heirs Energies, which together have taken over much of Nigeria’s onshore and shallow water petroleum resources after major global players like Shell, Exxon, and Addax Petroleum withdrew from the market.

Brown stated that these transactions have positively reshaped the industry, highlighting that the Nigerian producers are dedicated to boosting output from the fields they've purchased, unlike what international oil companies (IOCs) are achieving.

"If you're part of the IOC, you're searching worldwide for new investment opportunities, but the local players primarily focus on Nigeria," he explained.

Seplat was established in 2009 by its former Nigerian CEO, Austin Avuru. After serving as CFO since 2013, Brown assumed the leadership role in 2020 when Avuru retired.

Seplat's journey towards expansion hasn't been without obstacles. In February 2022, they struck a deal with Exxon, yet encountered significant delays following the intervention of Nigeria's state-run petroleum entity, NNPC, which obtained a legal injunction halting the transaction.

The then-President Muhammadu Buhari seemed to have authorised the deal in August 2022 solely rescind the approval three days later.

In the subsequent year, as disputes about the deal persisted, Brown faced accusations of racism and saw his visa briefly suspended; however, these claims were vehemently denied by Seplat.

Brown stated he was "stunned" by the accusations but had navigated the legal system to address the matter and maintained faith in "the procedure".

In the end, President Bola Tinubu endorsed the agreement last year as well as multiple other comparable deals. Brown mentioned being favorably impressed by the fresh government's "meticulous" strategy.

"It was incredible to have all those deals unlocked and approved, which is fantastic for Nigeria as we will begin seeing growth in oil production," he stated.

This week, as another indication of much-appreciated changes within the industry, Tinubu dismissed several individuals. NNPC’s entire 11-person board And they swapped their longtime chief executive for a former Shell engineer named Bashir Ojulari. Among the newly appointed board members is also former Seplat head Avuru.

In the coming five years, Brown plans to boost production past 110,000 barrels of oil equivalent per day by undertaking additional drilling activities. The company aims to supply more gas to Nigeria’s market and kick off exports of liquefied natural gas as well.

I believe it was necessary to shift away from Exxon's management, as they had invested very little since 2019 or perhaps even before then," he stated. "Clearly, indigenous control over energy assets is the path forward for Nigeria.

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