Divestments: Indigenous energy firms capable of boosting oil

Seplat Energy PLC has asserted that Nigeria’s vast sub-surface potential can be maximized and oil and gas production enhanced through expedited divestments and related transactions. This statement was made by Seplat Energy’s CEO, Mr. Roger Brown, at the 2024 NOG Energy Week Conference & Exhibition in Abuja.

During a panel session titled ‘Defining the Regulatory Frameworks Required to Support the Capabilities of Independents and Incentivize Growth,’ Mr. Brown emphasized that the success of Nigerian independent energy companies would benefit the nation through increased oil revenues and the development of a domestic gas-to-power industry. This, in turn, would fund expansion into renewable energy, enhancing energy access and supporting the UN Sustainable Development Goals by providing reliable and affordable energy.

Mr. Brown highlighted that International Oil Companies (IOCs) are likely to divest to credible local players with strong governance and accountability in their Environmental, Social, and Governance (ESG) efforts. He noted that indigenous companies must also possess robust balance sheets and credibility in international financial markets, as the acquired assets will require future development. Furthermore, these companies need to collaborate with local communities to maintain or increase Nigerian content, a practice Seplat Energy has adhered to for years.

Addressing Nigeria’s energy aspirations, Mr. Brown pointed out that independent energy companies will play a pivotal role in achieving the goals of the “Decade of Gas.” He stressed the need for a strong governance framework to support the bankability of private sector investments in this space.

Nigeria’s primary decarbonization objective is to end small-scale generation by integrating households and businesses into a reliable national grid that utilizes gas resources, reduces electricity costs, and facilitates the development and connection of renewable energy to a nationwide grid.

Seplat Energy is committed to ending routine flaring by mid-next year and encourages all producers to prioritize this goal. The company’s new ANOH gas plant has the capacity to supply enough gas to support over 1GW of electricity on the grid. This can replace hundreds of thousands of home generators, thereby reducing electricity costs and eliminating the use of costly, highly polluting generators that significantly hinder Nigeria’s economy and contribute to carbon emissions.