Seplat Energy, the Nigerian oil company that recently acquired the local operations of ExxonMobil, has announced plans to double its oil production within six months, increasing output from approximately 50,000 barrels per day (bpd) to 120,000 bpd.
Addressing concerns about NNPC’s history of financial mismanagement and debt, Seplat CEO Roger Brown remarked in an interview with the Financial Times, “We have no concerns working with NNPC. There’s been a massive change with President Tinubu, realising that production is a great way of getting dollars into the country and supporting the currency.”
Nigeria has experienced a significant decline in oil production, which has led to falling oil exports and a weakened naira. Poor policies, underinvestment, and regulatory inefficiencies have contributed to declining output, reducing the country’s foreign exchange earnings and exacerbating economic challenges.
In 2020, Nigeria’s exchange rate stood at approximately 360 naira to the US dollar, but by December 2024, it has weakened to around 1,537 naira to the dollar, placing enormous pressure on the nation’s economy.
Seplat Energy’s plan to increase production by 60,000 barrels per day would generate additional daily revenue of approximately $4.57 million to $4.87 million daily. Annually, this equates to an increase of about $1.67 billion to $1.78 billion in revenue.
Seplat’s Acquisition of ExxonMobil’s Assets and Expansion Plans
The acquisition, valued at $1.28 billion, involved the purchase of Mobil Producing Nigeria Unlimited’s oil and gas assets, positioning Seplat among the largest domestic producers. The deal, finalized in December after a two-year regulatory delay, grants Seplat control over 11 onshore oil blocks, 48 oil and gas fields, three export terminals, and five gas processing facilities. The combined assets represent approximately 16% of Nigeria’s total production capacity.
Seplat’s Chief Financial Officer, Eleanor Adaralegbe, also told the Financial Times that minimal investment in the acquired assets over recent years had limited their output. “The assets have had very minimal investments until now. We expect that once we come in, there will be an opportunity to grow that much further,” she stated.
The company’s Chief Operating Officer, Samson Ezugworie, highlighted the substantial untapped potential of the newly acquired fields, citing over 600 wells drilled, with only around 200 currently producing. “We have significant idle wells that need to be rejuvenated and brought back into production within a short period of time,” Ezugworie said.
Seplat’s acquisition comes at a time when several international oil majors, including Italy’s Eni, Norway’s Equinor, and Addax Petroleum, have exited Nigeria’s troubled onshore and shallow water sectors due to environmental issues and declining production. Shell also sold its onshore business to the local consortium Renaissance for $1.3 billion, with many foreign companies shifting focus to offshore oilfields with fewer environmental risks.
Seplat joins a growing group of Nigerian oil companies stepping into the void left by departing foreign firms. Local companies aim to leverage their deeper understanding of community relations and regional dynamics, a key factor in improving operational stability in areas often affected by local disputes over environmental damage.
Despite criticism that local firms are acquiring underperforming assets with limited remaining value, Seplat maintains optimism about the long-term prospects of its new holdings. Ezugworie emphasized that the company sees “significant scope and opportunity” for increased production and believes substantial reserves remain untapped in the acquired fields.
