‘Nigeria accounts for 1% of world daily oil production’
• IOCs’ Divestment, Opportunity For Indigenisation, Says Seplat Boss
The under-exploitation of hydrocarbons in Nigeria only put the country at producing just one per cent of the world’s daily oil output, Chief Executive Officer, Seplat Energy Plc, Roger Brown, has said.
Brown, who spoke at the Nigerian Association of Petroleum Explorationists (NAPE) workshop in Lagos, urged stakeholders to vigorously harness inherent opportunities in the sector.
He said in this era of divestments by the International Oil Companies (IOCs) from Nigeria, indigenous energy companies with the right competencies and wherewithal are natural partners to the government in the quest to harness oil and gas assets.
Brown, in his presentation at the event, said the IOCs would continue to exit the onshore and shallow water terrain of the Niger Delta, noting that the move should be considered an opportunity for indigenisation, and not a negative for Nigeria.
He said indigenous energy companies have a Nigeria investment appetite and are not looking to leave the country, adding that they understand the country’s risks well and have a more practical approach to macro events with a long-term investment horizon.
According to him, Nigeria accounts for one per cent of the world’s daily oil production, but the potential in the sector remains vast.
“The sector players need to work together more collaboratively to ‘grow the pie’. It is a shared risk and shared prosperity scenario. We should work together to grow and monetise the nation’s resources, particularly when worldwide demand for liquids will fall – at some point,” he added.
Brown explained: “Capital will only travel to and stay in Nigeria when the investment landscape is transparent and stable. Given the uncertainties, investors struggle to value the future – there is always some event that impacts value.
“Equities are extremely undervalued, and foreign currency unavailability for exit is a barrier to inward investment. Debt lenders are uncomfortable if equity is scarce – don’t want to be the only solution, particularly if adverse events happen.”
The greatest business opportunity ahead, Brown noted, is to supply the right mix of energy to support Nigeria’s growth. In doing so, he said all energy companies must make a positive social impact and contribute to Nigeria’s achievement of the United Nations’ Sustainable Development Goals (SDGs).
Narrating the Seplat Energy transition story, he said the company was developing its upstream business by selectively expanding its asset base, optimising the gas/oil mix, increasing production, reducing costs and carbon intensity, and increasing revenue assurance by diversifying routes to market.
Chairman of the Nigerian Upstream Petroleum Regulatory Commission (NRC), Isa Modibbo, said divestments by the IOCs were creating opportunities and possibilities for Nigeria’s educated youth.
Noting that he was happy about the ongoing divestments, Modibbo said no country in the world keeps its national patrimony in the hands of a third party.
Admitting that oil remains a very important tool for national development, diplomacy and power, he said the world had reached a stage where oil was no longer what it used to be and that technology was becoming the next big thing.