A Nigerian company has taken the lead in the local operations of ExxonMobil and aims to significantly increase oil production in the coming months. Seplat, a London-listed firm, finalized its acquisition of various oil and gas assets from ExxonMobil in December after a prolonged approval process that lasted over two years.
Seplat’s leadership revealed plans to ramp up production from approximately 50,000 barrels a day to around 120,000 barrels a day within the next six months. According to the company’s Chief Financial Officer, Eleanor Adaralegbe, the assets they acquired have seen minimal investment in the past, presenting a great opportunity for growth.
The $1.28 billion purchase of Mobil Producing Nigeria Unlimited positions Seplat among Nigeria’s largest oil producers, with a portfolio that includes 11 onshore oil blocks, 48 oil and gas fields, three export terminals, and five gas processing facilities. This expansion means that Seplat now controls about 16% of Nigeria’s current oil production capacity, as noted by CEO Roger Brown.
Seplat is expected to manage the acquired assets alongside the Nigerian National Petroleum Company (NNPC), as required by local regulations. Brown expressed confidence in collaborating with NNPC to boost overall production, aligning with the ambitions of President Bola Tinubu to increase Nigeria’s oil output. However, NNPC has faced longstanding issues of alleged corruption and mismanagement, with debts to suppliers exceeding $6 billion.
Brown remarked that recent changes under President Tinubu have shifted the focus toward production as a means to stabilize the economy and support the national currency. Many of the assets require significant time and investment to become operational again, as only around 200 of the 600 drilled wells are currently producing oil, according to Chief Operating Officer Samson Ezugworie.
ExxonMobil’s divestment aligns with a trend of international oil companies exiting Nigeria’s onshore and shallow water sectors due to environmental concerns and decreasing production. Companies such as Eni, Equinor, and Addax Petroleum have all left the country’s oil market. Additionally, Shell, which has been a key player in Nigeria since drilling the country’s first well in 1956, recently sold its onshore business to a local consortium for $1.3 billion, drawn by more favorable conditions in offshore oilfields.
As the landscape shifts, more local oil companies are stepping into the void left by their international counterparts. These Nigerian firms are eager to enhance their production capacities and leverage their understanding of the local context to engage more effectively with communities that have often clashed with foreign firms over environmental concerns.
While some critics claim that local companies are acquiring aging assets with little future potential, Seplat stands firm in its belief that their newly acquired assets hold considerable promise. Ezugworie emphasized that they see ample opportunities for production and substantial reserves waiting to be tapped.