Nigeria: After the departure of the oil giants, Seplat makes its mark on the market

London-listed Nigerian company Seplat Energy plans to double its oil production in six months to around 120,000 barrels per day. The announcement follows the completion last December of the acquisition of ExxonMobil's onshore and shallow water assets, a major $1.28 billion project that had been delayed for two years by Nigerian regulators.

With this acquisition, Seplat becomes one of Nigeria's leading oil producers, controlling 16% of Nigeria's current production capacity through a diversified asset base comprising 11 onshore oil blocks, 48 oil and gas fields, three export terminals and five gas processing facilities.

"Investment in these assets has been very minimal to date," said Eleanor Adaralegbe, CFO of Seplat, in an interview with the Financial Times. "We believe that once we are fully operational, we will have the opportunity to grow even further."

The acquisition places Seplat in direct partnership with the Nigerian National Petroleum Company (NNPC), in accordance with national legislation. Managing Director Roger Brown expressed confidence in the collaboration, saying that Seplat shared Nigerian President Bola Tinubu's stated objective of increasing oil production to boost the country's foreign exchange reserves and stabilise its currency.

Brown also stressed the need to revitalise neglected assets. "Many wells require investment to become operational again. We have drilled over 600 wells, but barely 200 are producing," said Samson Ezugworie, Seplat's Chief Operating Officer.

The acquisition of Seplat comes at a time when the international majors are gradually withdrawing from Nigeria's onshore oil sector. ExxonMobil, Shell, Eni, Equinor and Addax Petroleum have sold off their assets in recent years, citing environmental concerns, production cuts and a strategic focus on offshore fields, which are deemed more lucrative and less risky.

Nigeria's onshore sector has long suffered from severe environmental damage and tensions with local communities. These factors, combined with decades of controversial management by NNPC, have hampered production and asset profitability.

Seplat, like other Nigerian oil companies, is banking on its in-depth knowledge of the country and its ability to interact effectively with local communities to exploit the opportunities left by international groups.

However, critics have expressed reservations, claiming that local companies often acquire ageing assets of limited value. Seplat rejects these allegations, stating that its new assets still have substantial reserves. "We see a significant opportunity in these assets. They are viable projects that still have potential for expansion," said Ezugworie.

Nigeria, Africa's largest economy, remains largely dependent on crude oil exports. The revival of onshore oil assets could help to offset recent falls in production and support the government's efforts to diversify its sources of revenue.

With its aggressive expansion strategy and its collaboration with the NNPC, Seplat hopes not only to increase its production, but also to play a key role in the transformation of the Nigerian oil sector, which remains a vital component of the national economy.