Page 9 - AfrOil Week 18 2020

AfrOil PERFORMANCE AfrOil
NIGERIA
Seplat Petroleum Development, an independent Nigerian company, reported last week that its oil output had increased slightly in the rst three months of 2020.
In its latest quarterly report, Seplat said that its working interest production had averaged 48,491 barrels of oil equivalent per day (boepd) in the January-March period. This figure is “within guidance” and is 4.1% up year on year, it said.
e company went on to say that its liquids production had grown substantially in the rst quarter, reaching 33,368 barrels per day (bpd). is marks a rise of 52.5% on the g- ure posted in the same period of last year and “re ects a contribution of 10,056 bpd from the recently acquired Eland’s OML 40 production and higher production from OML 53,” it stated, referring to the takeover of Eland Oil & Gas.
Seplat said it had earned an average of $49.85 per barrel from oil sales in the rst quarter of 2020, down by about 28.5% on the 2019 aver- age of $69.73 per barrel. It attributed the drop to “the outbreak of the COVID-19 (coronavirus), which led to a signi cant decline in demand, at the same time as the activities of Saudi Arabia and Russia war were creating a supply glut with an inevitable collapse in global oil prices.”
e fall in prices led to lower turnover. Seplat reported that its revenues from crude oil sales had amounted to $107.4mn in the rst quar- ter, 8.8% below the previous year’s figure of $117.8mn.
Meanwhile, the company also saw natural gas sales revenues drop to $23.1mn in the Janu- ary-March period, down by 44.6% on the year- ago gure of $41.7mn. At the same time, Seplat’s total revenues slid to $130.5mn in the rst quar- ter, down by 18.2% on the previous year’s gure of $159.5mn.
e company also noted that its gross pro ts
had declined to $33.1mn, down by 59.3% on the gure of $88.4mn reported in the rst quarter of 2019. is was the result of “lower revenues, higher crude handling fees and non-produc- tion costs primarily consisting of royalties and DD&A [depreciation, depletion and amortisa- tion],” it said.
Additionally, it reported an operating loss of $77mn, compared with an operating pro t of $32.5mn in the January-March period of last year. is change was largely the result of a $145.5mn impairment charge from falling oil prices but was partially o set by adjustment for its $46.8mn under-li position. ™
 e bear market has caused the country to lose its valuable revenues from oil exports. Mean- while, Nigeria’s re neries are barely operable, producing fuels only on a sporadic basis.
NNPC announced in early April it intended to close the plants while it searches for nancing to upgrade them. It wants to modernise them by o ering operation and maintenance (O&M) contracts to investors.
NNPC was hoping to raise the plants’ capac- ity to 445,000 barrels per day (bpd) by 2022, in order to end gasoline imports. But it will strug- gle to attract partners to invest in their repair
and improvement during the current crisis. NNPC hired Italy’s Maire Tecnimont to overhaul the facilities at Port Harcourt in March last year, with Italian oil rm Eni selected as a technical advisor. However, while Tecnimont has inspected the facilities and drawn up plans for their rehabilitation, it is still waiting on a nalised contract to proceed with engineering
and construction work.
In another move to rein in spending, NNPC
has also said it will end subsidies for fuel, which have drained billions of dollars from public cof- fers over the years. ™
Seplat Petroleum reports oil output up and revenues down in Q1-2020
The rm’s output averaged 48,491 boepd in Q1-2020 (Photo: Seplat Petroleum)
Week 18 06•May•2020 w w w . N E W S B A S E . c o m P9