Seplat Realises $2.50/mn Btu in Nigeria
Seplat, the London and Nigeria-listed independent producer, has reported a healthy increase in its Nigeria average realised gas price.
It reached $2.55 per thousand ft3 ($2.50/mn Btu) last year, a 34% increase from its 2014 figure of $1.90/thousand ft3. In its annual results on March 24, it also said gas revenues increased to $77mn, from $27mn in 2014.
Nigeria's state-dominated power sector has increased prices paid for gas supplies over the past year or so, as a first step to stimulate upstream gas production for its targeted expansion of the country's gas-fired power generation sector from 4,000 MW currently to 20,000 MW in 2020. That target looks ambitious given constraints on investment both upstream and in the power sector, but independent producers are making progress and a new fully financed non-state power plant (Azura Power) is being built with modern Siemens gas turbines.
Seplat said gross processing capacity at its Oben gas plant in the Niger Delta reached 300mn ft3/d last year which it expects to increase to 525mn ft3/d. It said it is a key gas supplier to the domestic market and underpins significant power generation.
Its net profit however fell by 73% to $67mn, as its realised oil price declined by 47% to $51.20/bbl. Net debt at end-2015 was $573mn, but Seplat noted that it secured a $1bn debt refinancing in January 2015.
Most gas production in Nigeria is by state-owned Nigerian National Petroleum Corporation (NNPC) and its foreign partners. According to Opec, Nigeria's marketed production of gas in 2014 was 44bn m3 (4.25bn ft3/d) – split roughly 50-50 between the domestic and export (primarily as LNG) markets. According to the same 2014 Opec figures, on top of that 10.7bn m3 was flared in the country.
Mark Smedley