Seplat Petroleum Development Company Plc (Seplat) has said it has been able to successfully reinstate gross production at its 3 fields OMLs 4, 38 and 41 to pre-Force Majeure levels, following the resumption of oil lifting activities in the Forcados Terminal.
“Since the recommencement of oil and condensate injection into the Forcados system at the end of May, Seplat has been able to successfully reinstate gross production at OMLs 4, 38 and 41 to pre-Force Majeure levels of around 75,000 bopd and 290 MMscfd, or 125,000 boepd,” Seplat said in an operations update made available to The Nigerian Stock Exchange on Wednesday. “On a net working interest basis this equates to around 34,000 bopd and 130 MMscfd, or 56,000 bopd.”
Seplat, a leading Nigerian indigenous oil and gas company listed on both the Nigeria Stock Exchange and London Stock Exchange, said it received had received notification from Shell Petroleum Development Company of Nigeria Ltd (“SPDC”), that the Force Majeure on exports from the terminal has been lifted.
SPDC, the operator of the terminal, had declared force majeure on the Trans Forcados pipeline in February 2016, following a militant attack on the key oil export route. This meant that it could not fulfil its obligations under the terms of the Terminal operating contract as a result of external factors.
Oil exports from the terminal range from 200,000 to 240,000 barrels per day (bpd).
The company said in the operations update that it has improved its oil exporting capacity, which experts say will positively impact its revenue position in future.
“Having completed repairs and upgrades on one of two jetties at the Warri refinery in April, work on the second jetty is on track to be completed during the second quarter (Q2” as earlier communicated,” it Seplat said in the update. “The upgraded jetties will enable sustained exports of 30,000 bopd (gross) and form part of the Company’s strategy to de-risk the distribution of future oil production to market.”
The company added that it is partnering with the Nigerian Government to develop a third export route, the Amukpe to Escravos pipeline, which it said will have a capacity of 160,000 bpd when completed.
Seplat’s revenue for the first quarter ended 31 March 2017 had dropped 43.3 per cent to $47.3 million compared to the corresponding quarter in 2016. The company’s earnings position improved as it narrowed its loss position to $19.13 million from $22.54 million in the first quarter of 2016, buoyed in part by foreign exchange gain.
Austin Avuru, Seplat’s chief executive officer, said that the resumption of exports at the Forcados terminal has enabled the company to remove production constraints, demonstrating Seplat’s strong underlying fundamentals.
“Our focus now is on restoring production and cash flow momentum whilst also establishing longer-term access to multiple export routes,” Avuru said “Whilst the lifting of force majeure is welcome news we continue to monitor the situation closely and, dependent on performance in the interim period, will seek to resume formal production guidance at our half-yearly results to be released on 27 July 2017”.
INNOCENT UNAH
