At the annual general meeting of Seplat Petroleum Development Company Plc that held in Lagos, Nigeria, on 20th May 2021, shareholders of the company approved the change of name to “Seplat Energy Plc” to reflect the company’s transition into a full energy solutions company.
Shareholders passed over eight (8) resolutions at the meeting, including the payment of dividends and corporate share buyback.
Speaking at the meeting, the Chairman of the soon-to-be Seplat Energy Plc, Dr Ambrosie Orjiako, said that is the duty of the board to plan for the long-term sustainability of the company, as Seplat’s assets have been analysed under different climate change and demand scenarios. He noted that Seplat is promoting low carbon environments in its operations.
Excerpts from his submission:
“Our ANOH Gas Processing Plant will be a major step forward in Nigeria’s drive to reduce carbon emissions, replacing potentially millions of small-scale, inefficient, and polluting generators with cleaner utility-scale power generation fired by Nigerian natural gas.”
“In addition, we intend to increase our disclosure of environmental, social and governance (ESG) data, by adopting the recommendations of the Task Force on Climate-related Financial Disclosures and will commit to reporting CO2 emission data to the Carbon Disclosure Project in the near future.”
“Helping our communities Part of our ESG commitment is already apparent in the long-term projects we implement in our host communities. As the Covid-19 pandemic struck Nigeria, it was our duty to help our host communities and States in whatever ways we could.”
“Of this, our Eland assets contributed 8,855bopd, or 26 per cent of total liquid volumes. Our financial performance enabled us to maintain our commitment to paying dividends. While other companies were cutting back or cancelling payments for the 2019 financial year, because of prevailing uncertainties, we honoured our commitment and paid a final dividend of US$0.05, for a total dividend of US$0.10 for 2019.”
“In October 2020, we announced an interim dividend of US$0.05 and the Board has since approved an additional top-up of US$0.05, maintaining our US$0.10 dividend for the 2020 financial year. Since we raised $535 million at our initial public offering in May 2014, we have returned $344 million to shareholders in the form of dividends.”
“The strengthening of our board is part of our ongoing desire to achieve world-class governance of our company. Six of our 13-member board are independent and we continue to work towards increasing diversity. In addition, as we announced in March, we have taken the bold decision to eliminate all related-party transactions – a move that exceeds the requirements of the UK Code of Corporate Governance.”
Also commenting the Chief Executive Officer of Seplat, Roger Brown, said there is a need to reduce oil extraction and the carbon emissions it creates. He said it is also important to recognise that Nigeria is a developing country with low access to energy and a rapidly growing young population, and hydrocarbons remain the country’s main resource and provide significant help for its economy.
In his words: “Nigeria needs to achieve significant growth in its capacity to deliver education and health services, food production and energy security. Without the development of its indigenous oil and gas industry these goals will become very difficult to achieve and so in Nigeria, the industry remains not just relevant but essential.”
“Secondly, we have created a new energy unit to focus on lower carbon to zero carbon fuel sources and the natural extension beyond gas is for Seplat to participate in renewable energy, such as solar power, and in emerging technologies such as carbon capture and storage. Our view is that Nigeria will benefit from being able to deploy renewable energy on its electricity grid rather than solely developing an off grid renewable solution. By providing a base load of cheaper, lower carbon gas on the grid, the acceleration of grid-based renewables will be possible, which is why we are currently focusing on accelerating our midstream gas business and additionally expanding into LPG, which is a good fuel source for cooking, preventing deforestation.”
“The priority for 2021 is to address our responsibilities as part of the global energy transition and to set realistic targets for how we as a company evolve to drive that transition along. Having survived the worst year in the history of the oil and gas industry, the actions we’ve taken before and during 2020 have left us in a position of strength and I am confident that as demand recovers and the imperative for gas increases, Seplat will exit 2021 a larger, stronger, more profitable company and strengthen its position as Nigeria’s indigenous energy leader.”
The Chief Financial Officer of Seplat, Emeka Onwuka, said: “Our robust financial performance in 2020 demonstrated the importance of a prudent approach to managing our finances, focusing on capital allocation, revenue diversification, cost control, hedging and debt management. Despite a challenging year in which revenues fell 24%, we repaid $100 million debt, invested $150 million for growth and maintained our dividend at $0.10 per share for the year.”
“Financial sustainability begins with the decisions we make about capital allocation and the priorities we consider when using cash. Our aim has always been to maintain a healthy balance sheet, focusing on cash generation first and foremost so we can build up a large reserve for future deployment and protect ourselves against the kind of downturns the world experienced in 2020.”
