Seplat Petroleum Development Company Plc (“Seplat” or the “Company”) has responded to recent press coverage suggesting that the Company benefitted from improper tax waivers in relation to its grant of pioneer tax incentive by the government of Nigeria. Whilst it is SEPLAT’s policy to not ordinarily comment on press statements or business dealings with the government, on this occasion it is deemed necessary to clarify SEPLAT’s position on this matter.
The company has, in a statement signed by Austin Avuru, Chief Executive Officer, noted that “In 2013, SEPLAT applied for pioneer status incentive through the Nigerian Investment Promotion Council (“NIPC”) as the government body responsible for investment promotion. The Company followed the prescribed process for application and provided all the information and documentation required in support of the application.” It also noted that the incentive was part of an industry-wide exercise and the company was one out of fifteen oil and gas companies that were granted the pioneer tax incentive.
Quoting the CEO, the statement went further to say “SEPLAT believes that it is an excellent example of the whole purpose of establishing the pioneer incentive scheme. The Company has fully re-invested the tax savings from the grant and has delivered verifiable results thereto. SEPLAT is now a key supplier of gas to the domestic market which is the direct outcome of the pioneer incentive granted to SEPLAT and aims to continue to contribute meaningfully to the growth and development of the Nigerian economy.”
Reeling out benefits from the tax holiday to the Nigerian economy, the statement said the grant of pioneer status has made it possible for Seplat to boost oil and gas production, provide employment opportunities, impact on their communities and help grow the Nigerian economy.
Gas production rose from an average of 90mmscfd to a current level of around 200 MMscfd with a target of 300 MMscfd by the end of 2015. This increase has been driven by an over US$300 million investment in gas development over the tax holiday period.
Oil production has grown from a daily average of 14,000 barrels in 2010 to the current daily rate of over 70,000 barrels. The statement also added that its royalty payments have gone up from an average of $40 million per annum in 2010 to US$147 million in 2014.
The Company further noted that it has continued to fund the NPDC/SEPLAT JV to drive these outstanding growths in oil and gas production despite being owed substantial sums in unpaid cash-calls from NPDC.
The statement added that the tax incentive has helped SEPLAT in creating over 300 new jobs and delivering several community development projects in their operating areas. The multiplier effect of our over US$700 million in annual expenditure through Nigerian contractors adds over 1,000 additional jobs.”
ABOUT SEPLAT PETROLEUM DEVELOPMENT COMPANY PLC:
Seplat Petroleum Development Company Plc is a leading indigenous Nigerian oil and gas exploration and production company with a strategic focus on Nigeria, listed on the Main Market of the London Stock Exchange (“LSE”) (LSE:SEPL) and Nigerian Stock Exchange (“NSE”) (NSE:SEPLAT).
In July 2010, Seplat acquired a 45 percent participating interest in, and was appointed operator of, a portfolio of three onshore producing oil and gas leases in the Niger Delta (OMLs 4, 38 and 41), which includes the producing Oben, Ovhor, Sapele, Okporhuru, Amukpe and Orogho fields. Since acquisition, Seplat has more than tripled production from these OMLs.
In June 2013, Newton Energy Limited, a wholly-owned subsidiary of the Company, entered into an agreement with Pillar Oil Limited to acquire a 40 per cent participating interest in the Umuseti/Igbuku marginal field area within OPL 283.
Seplat is pursuing a Nigeria focused growth strategy and is well-positioned to participate in future divestment programmes by the international oil companies, farm-in opportunities and future licensing rounds.
For further information please refer to the company website, http://