TheCable

Seplat Energy says it will ramp up its gas production capacity by an additional 390 million standard cubic feet per day (MMSCF) by the end of the year, to boost domestic output.

According to NAN, Samson Ezugworie, chief operating officer (COO) of Seplat Energy, spoke to journalists after a panel session at the Africa Energy Forum on Wednesday.

The forum was held on the sidelines of the ongoing Oil Technology Conference (OTC) in Houston, Texas.

Ezugworie said the company produces 460 MMSCF of gas per day but plans to increase production to 850 MMSCF by the end of 2024, when Assa North Ohaji South (ANOH) and Sapele plants will come on stream.

He said the entire 850 MMSCF would be dedicated to the domestic market, noting that the gas will be used by all within Nigeria.

According to the Seplat COO, raising production would significantly address problems bordering gas-to-power — as gas produced from its Oben plant supplies the national grid, thereby boosting power generation capacity.

Speaking further, Ezugworie said gas pricing and debt remain a major issue in the industry, discouraging most international oil companies (IOCs) from investing in the sector.

He said pricing needs to be gotten right, adding that debt associated with gas produced is a significant deterrent to the business.

‘‘But for us at Seplat, what has played out for us is in the areas of strategy and foresight because we clearly know that even if you owe today, there is a chance that you will pay tomorrow because the issue about debt is clearing,” he said.

“Now, we are working ourselves into the interruptible gas supply and willing buyer willing seller contracts.

“In addition to that, what we are also doing is that we have a payment structure for those who are off taking our gas that ensures that going forward; we are not going to be having debts piling up. But then, have a structured way of paying outstanding debts.

“Though, it is a delicate balance because this is something we have to do to contribute to the growth of the country, at the end of the day, you will see that the profit margin is not that significant.”

‘GAS ACCOUNTED FOR 40 PERCENT OF SEPLAT’S PRODUCTION IN 2023′

The COO also said gas accounted for 40 percent of the company’s production at the end of 2023, while liquids made up 60 percent.

He said the revenue from the 40 percent gas production amounted to $123 million at 11 percent.

‘‘So, what does that tell you? The revenue margin is very little but not a waste,” he said.

“We see that as a good vehicle that we also need to leverage on in running the oil business.

“Why is it so? If you want to run the oil business in a very responsible manner, then it has to go back to the Environment Social Governance (ESG) considerations.”

Ezugworie added that the company has concluded plans to end gas flaring in 2025.