Reliable energy,
limitless potential
Seplat Energy Plc
Annual Report and Accounts 2021
About us
We changed our name to Seplat Energy to reflect
the exciting future ahead of us as a supplier of a more
diverse range of energy products, not just oil and gas.
Nigeria –
a nation with
limitless potential
As Nigeria’s energy champion, we want to drive our
country’s transition to sustainable and affordable
energy and harness its power to transform our economy
and the lives of our large and rapidly growing population.
Achieving a Just Transition will be our goal. We recognise
that Nigeria will remain dependent on oil revenues until
its economy diversifies and other sectors prosper. We
must be good stewards of Nigeria’s existing oil resources
and develop the nation’s abundant gas reserves to drive
the coming transition to this cleaner, more efficient fuel.
The transition from small-scale diesel and petrol
generation to large-scale gas-to-power will improve
efficiency and drive cost reductions that will accelerate
economic growth and diversification, thereby improving
the nation’s wellbeing.
Step by step, we will ultimately lead Nigeria towards
the most sustainable forms of energy, which will harness
the limitless blessings of its abundant sunlight, wind
and the power of its rivers, for the benefit of its people
and the natural world.
Our ambition is simple but bold – we want to supply
the energy that drives a growing economy, creates
a stronger society and provides opportunities for
all Nigerians to prosper.
seplatenergy.com
Driven by
our purpose
Deliver sustainable energy
solutions for society.
Nigeria’s large and growing population is
hampered by its relatively poor access to
energy, especially in rural areas beyond the
reach of its gas infrastructure. The country’s
dependence on imported diesel creates a
drain on economic resources as hard-earned
currency leaves Nigeria to fund an expensive,
inefficient and polluting fuel.
By providing accessible, reliable and
sustainable energy, fuelled by Nigeria’s
abundant gas and renewable resources,
we will drive Nigeria’s social and economic
prosperity now and in the future.
Strategic report 1 Governance report 74 Notes to the consolidated 149
financial statements
Highlights 2 Governance dashboard 76
Chairman’s overview 78 Separate statement of profit or loss 229
Quick guide 4 Board of Directors 80 and other comprehensive income
Corporate governance report 86
At a glance 6 Board Committee reports 98 Separate statement of financial position 230
Directors’ remuneration report 115
Chairman’s statement 8 Report of the Directors 132 Separate statement of changes in equity 231
Statement of Directors’ responsibilities 136
Becoming Seplat Energy 14 Audit Committee’s report 137 Separate statement of cash flows 233
Statement of Corporate Responsibility 138
Market 16 Notes to the separate 234
financial statements
Chief Executive Officer’s interview 20
Strategy 26
Value creation 28 Additional information 261
Key performance indicators 30 Payments to governments (unaudited) 262
Notice of ninth Annual General Meeting 264
Additional performance metrics 32 Unclaimed dividend list 266
General information 275
Risk management 34 Financial statements 139 Glossary of terms 276
Principal risks and uncertainties 40
Operational overview 46 Independent auditors’ report 140
Financial review 56 Consolidated statement of profit or loss 143
and other comprehensive income
Corporate social responsibility 62
Consolidated statement 145
of financial position
Consolidated statement 146
of changes in equity
Consolidated statement of cash flows 148
Highlights
Highlights
2021
The higher oil prices of 2021 more than offset the
impact of lower oil volumes, which were affected
by a prolonged outage of our main Forcados
export route in the third quarter.
Financial performance Revenue $733.2m
Despite a challenging year for the Nigerian oil and gas 2021 £733.2m
industry, our robust financial performance delivered 2020 $530.5m
revenues up 38% and strong cash generation that fortified 2019
the balance sheet and underpinned the confidence of $697.8m
international investors to support our proposed and
transformational acquisition of MPNU.
Read more
Page 56
Cash at bank $340.5m Production cost/boe $9.9/boe
2021 £340.5m 2021 9.9
2020 $258.7m 2020 8.9
2019 2019 6.2
$333m
Adjusted EBITDA* $371.8m Operating cash flow $394.3m
2021 £371.8m 2021 £394.3m
2020 $265.8m 2020 $329.4m
2019 2019
$480.4m $341.6m
Net debt
$426.1m Dividend Per Share USc10/sh
2021
2020 £426.1m 2021 10
2019 $439.7m 2020 10
$465.6m 2019 10
* Adjusted for non-cash items including impairments, fair value adjustments, abandonment, and exchange loss.
2 Seplat Energy Plc Annual Report and Accounts 2021
Strategic Report 01—73
Operational performance Number of wells drilled 8 Governance Report 74 — 138
Volumes of exported oil were lower than the previous 2021 8
year because of downtime on the Forcados export route 2020 9
in August and December and delays to the alternative 2019
Amukpe-Escravos Pipeline. However, gas production 11
increased by nearly 7%.
Read more
Page 46
Liquid 29,091 bopd 2P Reserves 457 MMboe Financial Statements 139 — 260
production
29,091 2021 457
2021 33,714 2020 499
2020 2019 509
2019 23,935
Gas production Total Recordable Injury 0.27
Rate (TRIR)
107.9 MMScfd 0.69
0.69
2021 107.9 2021 0.27 Additional Information 261 — 276
2020 101 2020
2019 2019
131
Production uptime 75% Lost Time Injury Frequency (LTIF) 0
2021 75% 2021 0
2020 83% 2020 0
2019 92% 2019 0
Annual Report and Accounts 2021 Seplat Energy Plc 3
Quick guide
A strategy
for transition
Read how Seplat Petroleum Built on strong
became Seplat Energy and how foundations
our new strategy will prepare us
to lead Nigeria’s energy transition
through the development of gas
and, in time, renewable energies.
Becoming Seplat Energy 14
Chief Executive Officer’s interview 20
Strategy 24
Value creation 28
Key performance indicators 30
Becoming Seplat Energy CEO interview Market Risk management | continued
Our purpose: Our vision: The values that drive us: Strategic Report 01—73 Strategic Report 01—73 Improving access Strategic Report 01—73 Conclusion Mapping our risk Strategic Report 01—73
To deliver sustainable energy Transform lives Safety to energy is Nigeria’s In the course of the year 2021, the oil and gas
solutions for society through energy. We will prioritise safety, which is a matter Roger Thompson Brown transition imperative industry recovered as oil prices rose to a peak The mapping of our risks considered both quantitative and qualitative
Our mission: of both individual and collective responsibility. Chief Executive Officer of $86/bbl in late October 2021 and the world factors. Seplat Energy’s risk mapping is underpinned by a two-factor
Nigeria is a nation with limitless potential. Its transition Leading Nigeria’s energy economy showed signs of improvement. spectrum – Likelihood and Impact, which are further plotted on the
to sustainable, affordable energy will be transformational, transition with accessible, Integrity The unprecedented headwinds posed by basis of Seplat Energy 5x5 methodology, to arrive at a final assessment
empowering every person, business and community to thrive. affordable and reliable We will behave with integrity in all our dealings. the Covid-19 pandemic continued to linger for each risk.
At Seplat Energy, we are making this future a reality. Our new energy that drives social throughout the year, with emergence of new
brand identity and name solidifies this commitment and and economic prosperity. Partnership strains of the Coronavirus, the latest of which Consequences
signals a transition for our business and Nigeria as a whole. Our ambitions will be driven by partnerships, is the Omicron variant.
so we strive to collaborate and be a trusted partner. Governance Report 74 — 138 Governance Report 74 — 138 Nigeria represents a huge market Governance Report 74 — 138 Certain Governance Report 74 — 138
opportunity for Seplat Energy, Despite the challenges and uncertainties
Ambition both in today’s hydrocarbon-based posed by the Covid-19 pandemic, the
We will be a driving and innovative force in the delivery economy, and in the lower-carbon, Company demonstrated resilience and
of energy solutions, for social and economic growth. renewable world of the future. commitment to delivering the 2021 work
programme while proactively monitoring
Agility and managing production costs across our
We strive to be an efficient organisation, proactive operations, in order to reap the benefit of the
and adaptive to changes in our environment. oil price recovery and remain competitive.
Market overview A land of opportunity… NIGERIA’S ABUNDANT On project delivery, the Company made Expected 15 14
With a population of 200 million projected to double ENERGY RESOURCES progress in key projects such as 11
Exciting future ahead Seplat Energy will be at the centre by 2050, improving access to energy is Nigeria’s Population Nigeria’s power 12,522 operationalising the Amukpe-Escravos 9
We changed our name to Seplat Energy to of Nigeria’s energy transition transition imperative. At present, only an estimated • Africa’s largest population, with more than 200 million people infrastructure challenge Bbl liquids pipeline, the completion of AGPC Gas Plant 20 16
reflect the exciting future ahead of us as a Three core beliefs will guide our strategy and business development With a new name and new strategy, the 57% of Nigerians have access to electricity, meaning Nigeria’s power system suffers an The Company demonstrated resilience and and the Sapele Gas Plant upgrade. These 17 19 12 13
supplier of a more diverse range of energy as we lead Nigeria’s energy transition: future is bright for Seplat Energy, according there is significant potential for growth just to serve and growing rapidly imbalance between generation 37bn commitment to delivering the 2021 work programme projects are critical for the ability of Seplat
products in what will soon be one of the Financial Statements 139 — 260 to Chief Executive, Roger Thompson Brown. Financial Statements 139 — 260 our existing population, let alone a future population • Currently 7th largest, will be the world’s 3rd largest country in 2050 and consumption. Across the Financial Statements 139 — 260 while proactively monitoring and managing Energy to evacuate its production from the Likelihood 18 8 4 Financial Statements 139 — 260
most populous countries on Earth. 1. Oil will remain vital to Nigeria’s economy because of its that could be twice as large as today. value chain, from power Reserves remaining without addition production costs across our operations.” core assets, demonstrate leadership in the Possible
contribution to government revenues, which fund the nation’s and second largest democracy generation to transmission and ESG space by putting out flares and ensuring
The greatest business opportunity we have day-to-day activities as well as its future development Fortunately, our country is blessed with abundant • More children are born every day in Nigeria than in the whole of Europe distribution to the end user, 40 years near-term growth for the Company.
is to supply the right mix of energy to support hydrocarbon energy resources that are close to infrastructure deficit is a major
Nigeria’s growth. In doing so, we must 2. Gas will provide cleaner, lower-cost energy that will in turn help to major population centres, with well-proven geology challenge that has affected -5,381 Average national daily production in 2021 Accordingly, the Company continued to give
also look to reduce global CO2 emissions, diversify and boost the economy and provide essential baseload that is being tapped by a long-established industry, Nigeria’s grid electricity supply. priority to laying the foundation and renewed
enter the renewable energy market, make to support future renewables supported by good infrastructure and regulatory and Estimated growth in Nigeria’s population Severe bottlenecks mean that 3,879 3,592 1.5 Mbopd focus towards strengthening its approach 5 1 26
a positive social impact in Nigeria and fiscal regimes. Furthermore, Nigeria is also blessed power stations are not operating -3,262 and credibility on Environment, Social and
contribute to its achievement of the United 3. Renewables are the future, for Nigeria and for Seplat Energy with plentiful sunshine, especially in the North where optimally, distribution is inefficient -287 -447 1,864 Estimated gas reserves Governance (ESG) issues in response to
Nations’ Sustainable Development Goals. gas and electrical grid infrastructure is scarce, as and energy losses are high, even -1,065 sustainability needs, as well as the
well as great potential for wind and hydro-electric 2050 401,315 before companies attempt to bill 203 Tcf introduction of the Company’s footprint
The transition to gas is imperative. Too How would you summarise Why become Seplat Energy? How does the new strategy Our change of name to Seplat We have to look after and respect our host development. 2045 364,712 customers and collect payments. Installed 67 and greenhouse gas (GHG) emissions Unlikely 3
much hard-earned Nigerian money is spent the year for Seplat Energy? It’s clear that Nigeria needs to be part of support this evolution? Energy reflects our belief that communities, help them where appropriate 2040 329,067 capacity Electricity that current gas production quantification. 7
importing diesel to run the inefficient and Oil prices were significantly higher in 2021 the global transition away from fossil fuels The strategy we announced last July is the greatest opportunity ahead and offer them, as stakeholders, a chance But there are impediments. The national grid is 2035 294,986 Non-available of 8 Bscfd could power
polluting generators that power Nigeria’s so we had a stronger year financially, towards cleaner and renewable energies, based around two business imperatives: of us is to supply the right mix of to share in our Company’s success. undeveloped, power blackouts are frequent, and 2030 262,977 capacity Overall, the Committee is satisfied that the
homes and business operations. This alone despite a shut-in at the Forcados Oil but it needs to be a Just Transition and Build a Sustainable Business and Deliver energy for Nigeria’s young and of a potential 12GW installed generating capacity, it is 2025 233,343 Non-operational 8GW Company has a robust risk management
is a huge opportunity, with the potential to Terminal during Q3, which constrained conducted at an appropriate pace. Transition. These are clearly rapidly growing population and We also have to look after our environment, estimated that as little as 2-3GW actually reaches the 2020 206,140 capacity system that serves to ensure integrity of
convert more than 20GW of energy our production and brought us in just below interdependent and we can’t do one drive Nigeria’s transition to locally and globally, by reducing our impact customer. Of those with access to electricity, most are Operational Direct solar irradiation business processes, decisions and activities
generation from imported diesel and petrol to the volume guidance for the year. Revenues Clearly, the country is heavily dependent on without the other. cleaner, more affordable energy and especially our carbon emissions, by reliant on small-scale, inefficient and expensive diesel capacity going into the future. The Company’s HSSE
Nigerian gas, just to satisfy existing demand. were up 38% at $733.2 million and this oil revenues and diversifying its economy that is accessible to all.” improving the efficiency of our operations or petrol generators, resulting in the world’s highest Transmission 1.8-5.0kWh/m Management System is also mature and
Beyond that is the need to increase energy translated into an EBITDA of $371.8 million away from these will take some decades. Sustainability is the first imperative, looking and by creating more power from renewable cost of energy in the world at 52 cents per kWh. reliable and has continued to deliver good
access from less than 60% at present, so we and operating cash flow of $394.3 million. after our society, our environment and our energy such as solar in the longer term. losses Total potential hydro HSSE performance year on year.
can provide universal access to reliable and Nigeria is also blessed with huge gas reserves finances. This is the bedrock of continuity In addition, some 80% of Nigeria’s total energy use Capacity
affordable energy for twice as many Nigerians However, more significantly, we saw progress and needs to deploy these as quickly as and progress on which we build the We support the goals of the Paris Agreement is biomass for cooking, which creates significant transmi ed 14GW Basil Omiyi
in the future, and let them use it to power their on several projects that are important to our possible to replace all the diesel it’s importing operational strategy of delivering transition, and are in step with society’s objective to get problems of deforestation, land erosion and Distribution Chairman, Risk Management
entrepreneurial spirit. future: the Amukpe-Escravos Pipeline was to generate electricity, and to provide which in return will allow us to strengthen the world to net-zero by 2050. We are now particulate pollution. and HSSE Committee
commissioned, meaning we are no longer additional power to improve access to energy the sustainability of the business and share capturing the data and doing the studies to losses
dependent on the Forcados export route; and support economic and social its success with our stakeholders. establish a comprehensive ESG baseline that Nigeria’s transition priorities represent significant Commercial
the Sibiri exploration well in OML 40 was development. allows us to build a science-based pathway opportunities for Seplat Energy: develop gas-to-
successful and encountered 229 ft of net Our priority is to help improve access to that gets us to net-zero. As part of those power to improve energy access; develop LPG losses
hydrocarbon pay across eight reservoirs; We want to lead this transition to gas and, energy across Nigeria, because this goal plans, we are working to eradicate routine markets to alleviate use of biomass; and develop Capacity
and we’re making good progress building beyond it, begin to develop a strong drives the success of our business. Reliable flaring at our operations by 2024, six years renewable energy to serve large areas of the country distributed
the ANOH Gas Processing Plant, which renewables business. So we will evolve from and affordable energy helps other Nigerian in advance of the Government’s target. not currently served by the national electricity grid.
will be a major revenue driver in 2023. being a company that simply extracts oil and businesses expand, this in turn creates wealth Source: Nigeria Power Baseline Report. JV receivable and future cash Liquidity risk
gas to one that can create and capture value and that increasing prosperity feeds back We have also launched our ‘Tree for Life’ call funding The impact of higher oil prices in 2021 offset
Oil remains Gas will So 2021 was really about laying the foundation right along the energy chain, whatever the into increased demand for energy. tree-planting initiative across Nigeria to Source: UN Population Division, Probabilistic Population Projections, 2019 Seplat Energy has the Nigerian Government the effect of outages on key export routes in
crucial for drive energy for strong growth in 2022 and beyond, and source of that energy may be. combat the effects of deforestation. As well as Joint Venture (JV) partner in significant Q3 and Q4 and this assisted Seplat’s liquidity
Nigeria’s transition and that was also demonstrated through the It’s a virtuous cycle as the energy as the environmental benefits the programme 5% operations of its business. Cash call funding position significantly in the year. Rare 10
development development change of name and new strategy we That’s why we decided to re-brand the infrastructure builds out, drives economic will also create jobs, particularly in the rural 8% from the government partners has historically Severe
announced to take us forward. Company as Seplat Energy – it’s a signal activity and brings Nigeria up to global levels areas which are heavily impacted by poverty. been poor, resulting in build up of legacy cash We manage liquidity risk by ensuring that
Seplat Additional Information 261 — 276 of our intent and how we see our future. of prosperity and energy consumption. Additional Information 261 — 276 Economy Nigeria’s use of gas 9% Additional Information 261 — 276 call receivables over time. In 2021, the sufficient funds are available to meet Negligible Minor Moderate Significant Additional Information 261 — 276
Energy In its World Economic Outlook, published in October 2021, the The chart reveals the unfortunate 10% government JV partners continued to remain commitments as they fall due, using both
International Monetary Fund predicted that Nigeria’s economy would fact that Nigeria’s abundant current in paying cash calls. However, the risk long-term and short-term cash flow
double in size between 2020 and 2026 (constant prices, US dollars). gas resource is not being used of cash calls sliding back to pre-2019 practice projections to monitor funding requirements
efficiently. Although some 41% of late payments is still there. To mitigate this for activities; and to ensure there are sufficient
Growth in Nigeria’s GDP (US$bn) of gas is exported, generating exposure, the Company continues to manage cash resources to meet operational needs. Assessment Topic Trend Topic Trend
valuable foreign currency, more its JV relationships very closely and actively Our cash flow projections take into Very high 11. Changes to fiscal and tax status
2026 922 gas is wastefully flared than used engages the respective government partners consideration the Company’s debts and High 1. Infectious diseases outbreak in Seplat 12. Bribery and corruption risk
for power generation in Nigeria. on timely payment of cash calls. covenant compliance. Surplus cash held is Medium 2. Niger Delta Militancy/Third party interference 13. Fraudulent activity risk
Renewables transferred to the treasury department which Low 3. Portfolio concentration risk 14. Field operations and project deliverability
are the future 2025 813 invests in interest-bearing current accounts, 4. Sustaining E&A programme 15. Geo-Political risk
time deposits and money market deposits. Movement trend 5. Oil price volatility 16. Cost control risk
2024 717 Decreasing 6. Merger & acquisition (M&A) risk 17. Foreign exchange risk
Increasing 7. Stakeholder management relationships 18. Information security risk
2023 635 27% Steady 8. HSSE risks 19. New Energy and Gas Market risk
9. Availability of capital 20. Corporate Governance & Compliance risk
2022 555 Exports 41% 41% 10. Liquidity
Reinjection 27%
2021 480 Flared 10%
Power generation 9% Source: Nigeria Power Baseline Report.
Read more 2020 429 Producer use 8%
Page 24 Industry 5%
2019 448
Source: IMF World Economic Outlook, October 2021
Read more14 SeplatEnergyPlc Annual Report and Accounts 2021 Annual Report and Accounts 2021 Seplat Energy Plc 15 R ead more20 SeplatEnergyPlcAnnual Report and Accounts 2021 Annual Report and Accounts 2021 Seplat Energy Plc 21 Read more16 SeplatEnergyPlc Annual Report and Accounts 2021 Annual Report and Accounts 2021 Seplat Energy Plc 17 R ead more38 SeplatEnergyPlc Annual Report and Accounts 2021 Annual Report and Accounts 2021 Seplat Energy Plc 39
Page 14 Page 20 Page 16 Page 34
Value Creation Model Stakeholder engagement Corporate Social Responsibility | continued
Generating value for Strategic Report 01—73 Engaging with Capital Markets Day Strategic Report 01—73 To maintain peaceful and mutually beneficial relationships Strategic Report 01—73
all of our stakeholders our stakeholders In late July, with some respite from the pandemic, with the local communities in the areas where we operate,
Seplat Energy hosted a Capital Markets Day at the we proactively engage with our local stakeholders, providing
London Stock Exchange to launch the Company’s clear and necessary information about our presence and
new strategy. The hybrid event was attended in operations. Through cooperation and collaboration, we strive to
person by London-based analysts and investors, create positive social and economic outcomes for the people.
and broadcast globally for stakeholders overseas.
Seplat Energy’s continuing success depends on many different The CMD gave an opportunity for attendees to meet
stakeholders, including employees, suppliers and local communities. and question most of the senior management team,
We recognise the importance of regular engagement with all our as well as numerous members of the Board.
stakeholder groups and adopt the most appropriate channels for each.
Our business model leverages our core strengths, relationships We strive to operate in a transparent and fair Local communities’ stakeholders’ The following engagements were held
and experience to create long-term value and shared prosperity manner, with utmost respect for the cultural engagement and relationship with key stakeholders from local communities
for all of our stakeholders. and ethnic traditions of the people while management activities in the Western Assets (OMLs 4, 38 and 41)
helping them to understand the social, During the year we promoted the Seplat in 2021:
Inputs — resources Our expertise Our competitive Outputs in 2021: What we delivered Governance Report 74 — 138 Stakeholder group Engagement method Key messages Our response Governance Report 74 — 138 environmental, and economic potential Energy model of community relationship Governance Report 74 — 138
and relationships advantages impact of our operations. To clearly management which emphasises • 356 meetings.
Workforce • We maintain a constructive and ongoing dialogue with • We also organise frequent pulse surveys to get direct • Calibration and reward system • We supported our colleagues to work from home the understand and respond appropriately to transparency, fairness, dialogue, cooperation,
Industry expertise For our shareholders our staff through regular employee-led forums, CEO feedback and understanding of matters important • Work from home pandemic local needs, we ensure the involvement and and shared development with our local • 102 conflict resolution and grievance
We are Nigeria’s leading 89% town halls and Q&A sessions, as well as the Group to our workforce. The responses and feedback allow • Job security participation in the analysis of local needs communities. In line with the principles of management engagements.
Unified and motivated Acquire independent oil and gas – Capital growth $73m intranet, social media channels, webinars and management to understand employee priorities and • Clarity on restructuring • We awarded three recognition bonuses through the year and the design and implementation of the the General Memorandum of Understanding
workforce The proposed acquisition of producer with a long track record – Dividends Response rate to Employee face-to-face meetings. develop appropriate action plans. • Consequence management to frontline colleagues sustainable development projects in these (GMoU) and community engagement • 25 relationship management meetings
500+ MPNU, announced in February of successful operations in the Engagement Surveys • Uniform application of policies communities. Our social investment procedure with our host communities, we including visits to traditional rulers.
multi-discipline employees 2022, will be transformational industry. We build on this Dividends paid to • The CEO hosted regular virtual town hall events, • We held quarterly JCC meetings. Joint Consultative • We provided mental wellbeing webinars and assistance programme is pertinently aligned with the deployed our established communication
for Seplat Energy, more than expertise every day. shareholders in 2021 which included open Q&A throughout the year, as Committee (JCC) is a platform used to discuss and and procedures to all our colleagues United Nations Sustainable Development channel to interact with the oil and gas • 183 project related engagements.
Operational expertise doubling our reserves well as small group discussions, and took feedback address all staff welfare issues and also share • Female representation at top Goals and our development projects are producing, pipeline, impact and access
84% and nearly trebling our Strong relationships via an anonymous survey and the Vault app. knowledge on the Company’s business performance • We launched the Seplat Women’s Awesome Network (SWAN) designed to promote better quality of life communities in the Niger Delta. • 15 engagement sessions with
of production is under Seplat’s control production. We are a trusted partner to the management in October aimed at promoting diversity in the business and socio-economic development of our representatives of government agencies
Nigerian Government and other For government host communities. The GMoU has been effective in the proactive and other stakeholders across Delta and
Strong financial management operators in the region. Our ANOH • Leadership transition • We provided training on Performance Management management of the overall relationship Edo States.
and access to capital Explore & appraise project is classed as strategically – Royalty and tax revenue Shareholders • Throughout the year, the CEO met virtually or in person • The management team and Board hosted a Capital • Seplat Energy’s overall strategic direction in December This edition of our social performance between the Company and the people in
$715m The Sibiri exploration well in important for Nigeria, for whom – Foreign and local capital investments and investors with major investors to discuss business performance, Markets Day event in July for investors and analysts. • Financial sustainability and control reporting will focus on the following: the territories. In the Western Assets (OMLs 4, • Negotiated and signed new GMoU
Cash at bank, undrawn facilities OML 40 was drilled in early 2022 we are a leading supplier of gas deleveraging and refinancing after the Full Year Results • 2020 Full Year Results and 2021 quarterly • We continue a programme of regular engagement with 38 and 41), there are nine host communities with Okpe Host Oil & Gas Producing
with early indications that it had for domestic power. 439 and Half Year Results market updates. • The CFO has hosted regular meetings with lending investors, analysts, lenders and others, providing updates • Local communities’ stakeholders’ while the Eastern Assets (OML 53) separate Communities comprising Ugborhen,
Effective HSSE and encountered eight oil-bearing banks and bondholders as part of our refinancing operational and financial performance on our performance engagement and relationship management GMoU covers the Ohaji field cluster (fifteen Sapele Okpe, Amukpe and Ugbukurusu.
risk management reservoirs. Low-cost production Number of meetings • The Senior Independent Director met virtually with major discussion. • Governance matters communities) and Jisike field cluster (two
0.00 AcquireAcquire Our focus is on maximising Payments and production $565m Financial Statements 139 — 260 held in the year shareholders to discuss governance issues. • Project delivery Financial Statements 139 — 260 • Grievance mechanism/ conflict resolution autonomous communities). • Negotiated and signed new GMoU Financial Statements 139 — 260
LTIF Develop Acquire output for the lowest cost and entitlement to government • The Chairman hosted a virtual Annual General Meeting and peace building with Oben Field, Orogho and Okporhuru
We completed eight this enables us to remain reported in 2021 which was also attended by the Directors. Through continuous dialogue, that begins Field Communities.
Good corporate governance new wells in 2021, recognising profitable even at low oil prices. • Capacity development and economic at the commencement of our projects and
91% our need for continuous DevelopDevelop For Nigeria Nigerian Government • In line with the JOA provisions, statutory meetings • Annual engagement with NUPRC (formerly DPR) to • Demonstrate compliance with regulatory • Both parties harmoniously agreeing on • We continue to comply with regulations to ensure business empowerment, and sustained throughout our operations, and The following engagements were held with
Corporate Governance Rating System (2021 development of our assets Develop Strong cash generation and Partners were held with Partners (SUBCOM, TECOM & OPCOM). present yearly Work programme/Budget and Bi-annual requirements, licence conditions & Joint strategic social investments for the continuity. decommissioning phase of our activities, key stakeholders from local communities
recertification) to ensure future streams Our prudent approach to – Infrastructure development In addition, monthly review meetings were held with operations review meetings. Operating Agreement (JOA). communities with the resulting Freedom • Sustainable Community infrastructure there were no community induced deferment in the Eastern Assets (OML 53):
of oil and gas that will drive ProducPer,opdrouccees, psr&ocseeslls & sell investment and low cost base – Multiplier effect from improved 95% Partners at the frontline levels and the CEO had to Operate (FTO). • We maintain a cordial relationship with our Partners and development & other initiatives or operations disruption.
profitable cash flow. Produce, process & sell enable strong cash generation Quarterly Management Review (QMR) sessions with • Quarterly contract/performance reviews with NCDMB • Maintenance of a harmonious relationship regulators to ensure the Company’s business objectives • 126 meetings.
to repay debt, invest for the future gas-to-power supply cost recovery from Partners the Partner leadership. and submission of Project Performance Reports and with Partners and regulators to ensure • Drive awareness of Nigerian content are met. Our engagement activities during the year
and pay dividends. This gives 1/3of Nigeria’s current power other statutory reports. business objectives are met. across the Seplat Energy operations in included proactive dialogue, project kick-off • 2 town hall meetings.
us the strength to tap capital generation can be underpinned order to support development of local • We support the operations of the business to enable optimal meetings, town hall meetings, project
markets when needed, as by our gas production • Drive an efficient cost recovery process. talents/capacity. value creation for critical stakeholders of the business – our monitoring/inspection meetings, project • 27 conflict and grievance management
evidenced by our $650m investors, partners, government, communities and employees. decommissioning meetings, land acquisition and intervention meetings.
refinancing in 2021. For our host communities • Ensure adequate funding for Capital meetings, open forum amongst others.
Produce, process & sell Projects e.g. ANOH Gas Plant, Amukpe- • 8 Relationship management meetings
We aim to maximise production – Economic empowerment Escravos Pipeline and the Sapele Gas Plant. including visits to traditional rulers.
of oil and reduce pipeline losses – Healthcare and education
wherever possible, if necessary 109Youths empowered following Additional Information 261 — 276 Suppliers and • Engagements held via virtual sessions and some and as a means of staying connected to the Community • Capacity building • We are in a constant dialogue with our suppliers and Additional Information 261 — 276 Communities Additional Information 261 — 276
by developing our own completion of skills acquisition contractors onsite workshops. Supplier Base and for up-skilling in tendering. • Performance reviews contractors to define expectations and to ensure mutually
infrastructure. Our ANOH gas programme in 2021 • E-Tender System awareness acceptable terms and conditions for continued partnership. Sustaining community
development will increase our 1,000 • There were three major Supplier engagements held • Annual Seplat Energy Vendor forum held in November • Upskilling the tendering process relationships, building on
share of the Nigerian gas market. ExploreE&xpaloprpera&isaeppraise For our employees in the year. 2021 themed ‘The Next Normal: Sustainability, Digital • Brand and Corporate vision partnerships and creating an
vendors attended the Seplat Transformation and Energy Transition’. • Strategic relationships impact on local communities
– Training and development Vendor Forum, 30% more • Working session to introduce the new Seplat Energy • Supplier engagement and development
than 2020 bidding platform, the e-Tender System which replaced • In addition to the above, the Company held Contract • Compliance with regulatory/statutory
Explore & appraise – Shares awarded 10,434 the manual and email processing of Seplat Energy Performance Reviews (CPR) with a select group of
Hours of employee tenders. vendors. Selection was based on contract values, relative requirements
training in 2021 high spend and the need to maintain strategic relationship
• Held a series of Community Contractor engagements with the vendors for value-driven performance as part of
for the Seplat Energy Western Asset for hands-on the Post-Award Contract Management.
practical session on the Seplat Energy Bidding Process
Social investment
$11m New energy Reduced GHG emissions Host communities The Base Manager and Community Relations Team management of all stakeholders and for a hitch-free • Employment opportunities. • Purpose of land acquisition and benefits • We continue to carry out proactive and scheduled
Seplat Energy will be at the – Scope 1 & 2 emissions reduction targets held several meetings as follows: implementation phase engagement with stakeholders, manage grievances, embark
for community development projects in 2021 centre of Nigeria’s energy Through collaboration with • Meetings to seek communities’ views and inputs during • Improvement in benefits for certain • Peaceful coexistence of communities on peace building, arrange FTO and community content
transition. We will focus on theRural Electrification Agency, 113 • Meetings with community youth groups project planning, as well as during the commencement category of community employees. discussions for projects and implement sustainable
increasing energy access by we intend to identify untapped of certain contracting processes • Respect for community constitution community development projects.
extending our business portfolio markets of unserved and potentially disruptive incidents • GMoU related meetings with the CDC forum and • For land acquisition including negotiation, document • Increasing contracting and procurement
to the renewable energy sector underserved customer Reduction in -13% averted HostCom leaders to address various concerns and execution and crops and land compensation payment opportunities for community vendors. • Respect for GMoU
(Solar) in addition to gas-to- segments, targeting commercial GHG emissions manage expectations discussions
power, using gas as a and industrial customers. • Grievance & Conflict Management Meetings to address • Addressing disagreements among • Explanation of Seplat processes and
• Freedom to Operate (FTO) related discussions to enable concerns and threats from communities and other local community representatives. standards including industry standards,
vendors to carry out various operation activities and communities-based stakeholders regulatory requirements, statutory
projects without hindrance • Need for a united Forum obligations.
more
• Project kick-off meetings to discuss project details, • Impact of projects on communities • Explanation of Seplat corporate governance.
transition fuel. ensure all parties’ readiness, health and safety and • Community content • Recruitment, contracting and procurement
and community development projects plan.
Readcommunity benefits are fulfilled and general • Opportunities for community labour
• Conflict prevention and peace building
Read more28 SeplatEnergyPlc R ead more68 SeplatEnergyPlc
Annual Report and Accounts 2021 Annual Report and Accounts 2021 Seplat Energy Plc 29 60 Seplat Energy Plc Annual Report and Accounts 2021 Annual Report and Accounts 2021 Seplat Energy Plc 61 Annual Report and Accounts 2021 Annual Report and Accounts 2021 Seplat Energy Plc 69
Page 28 Page 60 Page 68
4 Seplat Energy Plc Annual Report and Accounts 2021
Strategic Report 01—73
Delivering robust Governance Report 74 — 138
performance
The new strategic framework Higher global oil prices offset the impact Financial Statements 139 — 260
we announced in 2021 is of a prolonged outage at Nigeria’s key
enabled by strong corporate Forcados export route, which affected
governance and risk Seplat Energy’s oil exports in the third
management, and built quarter of 2021.
upon the values of safety,
integrity, partnership,
ambition and agility.
Market 16 Operational review Upstream performance review 50
Midstream Gas performance review 52
Risk management 34 Operational Strategic Report 01—73 Financial review 56
performance
We continue to actively develop our portfolio, high grading
our enlarged inventory of opportunities and maximising value
by focusing on those that offer the best cash returns.
Principal Risks & Uncertainties 40 HSE performance Reserves and Seplat Energy’s portfolio comprises direct interests in seven oil and gas blocks Governance Report 74 — 138
Safe and responsible operations are critical to resources and a revenue interest in one other block. This portfolio provides us with a robust
the delivery of Seplat Energy’s strategy. Staff platform of oil and gas reserves and production capacity, as well as material
and contractors worked a total of 8.0 million upside opportunities to add reserves through future development.
man-hours with no fatalities, lost-time injuries,
or major injuries in the period.
The Company has achieved 28 million hours 2P Reserves 2P reserves at 31/12/2021 2P reserves at 31/12/2020
without LTI on its operated assets. There were At 31 December 2021, total working interest
88 HSE incidents in total, compared to 107 in 2P reserves, as assessed independently Liquids(1) Gas Total Liquids Gas Total
2020, including two reportable spills and six by Ryder Scott Company, L.P., stood at 457.1 MMbbl Bscf MMboe
gas leaks, all of which were remediated with MMboe, comprising 219.2 MMbbls of oil Seplat % 144 MMbbl Bscf MMboe
limited environmental impact. and condensate and 1,379.4 Bscf of natural 45% 5 651 256
gas (237.8 MMboe). The change represents 40% 39 68 17
Stakeholder engagement 60 Effiong Okon an organic decrease in overall 2P reserves OMLs 4, 38 & 41 40% 4 660 156 693 275
Operations Director of 8.4% year on year, due to production of OPL 283 Fin. interest 25 153
10.6 MMbbls of liquids and 39.4 Bscf of gas, OML 53 45% 2 - 4 5 66 17
and reclassification and revisions of OML 55 82% 219 -
Onitsha previous estimates. OML 40 - 25 44 742 172
Ubima 1379 2
OML 40 OML 4 Total 50 5
Sibiri 457
Opuama OML 41 Oben 27 0 27
Sapele Okporhuru
Gbetiokun Okwefe 40 4 Financial Statements 139 — 260
Mosogar
241 1501 499
Ubaleme Amukpe Orogho 1. Eland has a 45% working interest in OML 40 until the Westport loan is fully repaid in accordance with the loan agreement, Additional Information 261 — 276
Ovhor reverting to 20.25%.
OML 38
Okoporo 2. Eland has an 82% Working Interest in the Ubima marginal field until the carry has been reached, reverting to 40%.
Escravos Umuseti (Pillar) Jisike OML 53
Communities 68 Warri OPL 283 Igbuku (Pillar) Ohaji
South Owerri
Iheoma
Forcados Odinma 2C Resources 2C resources at 31/12/2021 2C resources at 31/12/2020
Emeabiam Working interest 2C resources stood at
74.9 MMboe, comprising 40.9 MMbbls Liquids(1) Gas Total Liquids Gas Total
Alaoma of oil and condensate and 197.1 Bscf of MMbbl Bscf MMboe
natural gas compared to 94.8 MMboe 28
in 2020. The 21.1% decrease is mostly Seplat % 4 162 56 MMbbl Bscf MMboe
due to the inability to prove producibility 45% 4 21 8
Oil & gas producing assets Omerelu Owu in Mosogar following the unsuccessful OMLs 4, 38 & 41 40% 3 14 6 48 167 77
Oil producing assets Ubima Drill Stem Test (DST). Consequently, the OPL 283 40% 2 0 3
Group’s working interest 2P reserves OML 53 45% 41 0 2 4 21 8 Additional Information 261 — 276
and 2C resources stood at 531.9 MMboe OML 40 82%
at 31 December 2021, comprising 260.1 Ubima 197 75 3 15 6
MMbbls oil and condensate and 1,576.5 Total
Environment 72 Bscf of natural gas (271.8 MMboe). 30 3
10 1
Port Harcourt 60 203 95
OML 55 Dama Krakama
Soku
Akaso
Nembe Ke Bonny
Robert Kiri Bonny
Inda
Brass Belema
Read more46 SeplatEnergyPlc Annual Report and Accounts 2021 Annual Report and Accounts 2021 Seplat Energy Plc 47
Page 46
Corporate Social Responsibility | continued Financial review
Environment Strategic Report 01—73 Revenue and other income Our aim has always been to Clearly focused capital General and administrative expenses Strategic Report 01—73
Revenue from oil and gas sales in 2021 was maintain a healthy balance allocation priorities increased by 5.4% to $80.1 million (2020:
Seplat Energy is committed $733.2 million, a 38.2% increase from the sheet, focusing on cash We are focused on low-risk $76.0 million) and reflect the increase in
to environmental protection $530.5 million achieved in 2020. generation first and foremost strategies to generate and deploy administrative activities across the business
and responsible operations so we can build up a large cash to grow the business and compared to the previous year, which was
Crude oil revenue was $618.4 million (2020: reserve for future deployment improve stakeholder returns more heavily impacted by the Covid-19
During the year, Environmental Impact Key steps to address climate-related Governance Report 74 — 138 $417.9 million), 48.0% higher than 2020, and protect ourselves against pandemic and its associated reduction Governance Report 74 — 138
Assessment (EIA) studies were carried out risks and opportunities: largely reflecting higher average realised oil global activity downturns.” Low-risk capital investment in activities.
for four fields: Amukpe, Jisike, Ogume and prices of $70.54/bbl for the period (2020:
Owu. We continued with our Environmental Governance Strategy Metrics & Targets Financial Statements 139 — 260 Emeka Onwuka $39.95/bbl). The total volume of crude lifted Direct operating costs, which include • Invest in growing the gas business An EBITDA of $371.8 million adjusts for Financial Statements 139 — 260
Compliance Monitoring programme to ensure We take pride in our position as the only Climate change, and the associated We recognise that a significant proportion Chief Financial Officer in the year was 8.8 MMbbls, lower than the crude-handling fees, rig-related costs to fuel Nigeria’s increasing demand non-cash items which include impairment,
environmentally safe and sound operations Nigerian energy company to be listed on both energy transition offer significant strategic of climate-related risk is tied to the climate 10.5 MMbbls lifted in 2020, due to the and operations and maintenance costs abandonment, and exchange losses,
and compliance with all regulatory the Premium Board of the Nigerian Exchange opportunities for Seplat, underpinned by impact of our own operations. We use a Financial decrease in production following the amounted to $172.1 million in 2021, 2.6% • Develop ANOH for equating to a margin of 50.7% for the year
requirements. Towards the Company target and the Main Market of the London Stock robust demand for natural gas. LNG and LPG greenhouse gas emissions calculator to review suspension of exports at the FOT. In addition, higher than $167.7 million in 2020. The long-term growth (2020: $265.8 million; 50.1%).
to end routine flares, we developed a Exchange. Our dual listing and the are likely to play an increasingly important role provide an accurate estimate of our carbon the Group’s 2021 produced liquid volumes increase was primarily because of the higher
verifiable process for greenhouse gas international make-up of our Board give us a in Nigeria’s energy mix over the next several footprint and have published the figures for Seplat Energy had a stronger year financially were subject to reconciliation losses of operational and maintenance costs of $107.9 • Offset expected decline in oil wells by Taxation
emissions quantification to monitor unique perspective of the twin challenges of decades in generating electricity, alleviating our Scope 1 and Scope 2 emissions below. amid higher oil prices despite produced 14.5%, compared to less than 10% in the million that include unaccrued late charges developing low-risk wells / prospects The income tax expense of $60.2 million
effectiveness of the ongoing projects. Nigeria’s energy transition: addressing climate severe energy poverty, reducing dependence We have an ambitious target to eliminate volumes being constrained by outages corresponding period in 2020. We expect of $13.8 million related to the OML 40 asset reflects a higher assessable profit driven by
change and alleviating energy poverty. on biomass for cooking, and achieving a just routine gas flaring, which represents around at our export routes. these to improve significantly when we operated by NPDC. On a cost-per-barrel • Sustain and optimise production higher accounting profit compared to the
Alignment with the energy transition. In response, we have 90% of our operational emissions, by the evacuate the bulk of our crude through the equivalent basis, production opex was higher prior year, and represents an effective tax
recommendations of TCFD In 2021 we continued to lay the groundwork created a New Energy Business unit to focus end of 2024 and are allocating $34 million Amukpe-Escravos underground pipeline. at $9.9/boe (2020: $8.9/boe) due to the Returns to shareholders rate of 34% (2020: $5.1 million; 6%). The tax
Our understanding of the strategic for our mission to play a leading role in this on growing our LNG and LPG businesses as (20% of our total 2022 Capex guidance) additional costs detailed above and the charge comprises a deferred tax charge
significance to our business from climate energy transition. We refocused our Board well as to explore opportunities in renewable for decarbonization and emissions reduction Gas sales revenue increased by 2.0% to average working interest production reducing • 10c/share for 2021 of $22.6 million and a current tax charge
change and the energy transition continues committees, establishing a Sustainability energy such as off-grid solar solutions. projects. Remuneration for our senior $114.8 million (2020: $112.5 million), due to in 2021 compared to 2020. However, a of $37.6 million. The deferred tax charge is
to evolve rapidly. Climate change is already Committee and an Energy Transition executives and for all employees is, in part, higher gas sales volumes of 39.4 Bscf continuous cost reduction drive for • Since raising $535m at listing in 2014 mainly driven by the unwinding of previously
identified on our Enterprise Risk Register Committee. We created a new ESG Risk management tied to achieving our greenhouse gas compared to 37.1 Bscf in 2020, which reflects production evacuation from the Gbetiokun we have returned around $400m unutilised capital allowances.
as a high-profile risk but we are now in Management Steering Committee with We recognise that as an oil and gas producer reduction targets. new gas wells coming onstream during the and Ubima fields resulted in a 26.4%
the process of integrating climate-related responsibility for driving the strategic ESG operating in the Niger Delta our business period. The average realised gas price was reduction in barging and trucking costs, • Policy revised to quarterly distribution Net result
risk more fully into our overall risk goals of our business. Our goal for 2022 is to faces significant risks from climate change. Environment – 2021 performance review: Additional Information 261 — 276 slightly lower, at $2.85/Mscf (2020: $2.87/ to $11.7 million (2020: $15.9 million). of $0.025 per share The profit before tax was $177.3 million (2020: Additional Information 261 — 276
management framework. continue to implement the ‘TCFD next steps’ In accordance with best practice, we are Mscf) and reflects the reduction applied to $80.2 million loss before tax) and profit for the
outlined in last year’s Annual Report, progress considering these under three broad KPI 2014 2015 2016 2017 2018 2019 2020 2021 the DSO gas-to-power volumes from IAS impairments reversal Balance sheet strength year was $117.2 million (2020: $85.3 million net
We carried out a first stress test of the on some of which was delayed by Covid-19. headings: physical risk (including high 7,719.89 7,035.29 10,342.83 9,735.62 7,473.90 15,318 12,780 August 2021. As previously reported, under IAS 36 the loss). The resultant basic earnings per share
resilience of our portfolio in January 2021 vulnerability to changing weather patterns, Flaring – million standard cubic feet (MMscf) 9,465 0.1089 Company identified the need to revalue its • Successful $650m bond offer in was $0.24 in 2021, compared to $0.13 basic
which affirmed that our business is resilient Our Board Committees for Risk Management flooding and rising sea-levels), transition risk, 0.002 0.002 0.0032 0.001 Other income of $20.1 million includes an assets due to the significant economic March 2021 to redeem existing $350m loss per share in 2020.
to a low-carbon energy transition, and we will and HSSE; Sustainability, and Energy and litigation risk. We look forward to 0.0021 underlift of $13.9 million (shortfalls of crude uncertainty of the Covid-19 crisis in 2020 and Senior notes and repay $250m drawn
carry out a second such stress test in 2022 Transition provide governance in driving our providing insights into the climate-specific Nil 0.0001 0.0001 lifted below Seplat’s share of production, booked a non-cash provision of $114.4 million on $350m Revolving Credit Facility Cash flows from operating
using at least two future climate scenarios, strategy to reduce the carbon intensity of our nature of these risks and their potential 1.5 Nil Nil which is priced at the date of lifting and across non-financial assets in the period. activities
including the IEA’s Net Zero Emissions by operations. This includes the steps needed to impacts on our business, operations and recognised as other income) representing 152 Following a reassessment of the business • Refinanced Eland’s $100m Reserve- Cash generated from operations in 2021
2050 Scenario. We will publish the results achieve our ambitious target of eliminating financial planning in our TCFD report in 0.19 0.19 kbbls and $5.2 million tariff income generated models and assumptions at the end of 2021, Based Loan on 18 March 2021 with was $394.3 million (2020: $329.4 million).
of this analysis as part of an inaugural report flaring by 2024 and improving wastewater mid-2022. from the use of the Company’s pipeline. a reversal of $74.7 million was recognised to new five-year $100m RBL facility due Net cash flows from operating activities were
aligned with the recommendations of the management in our operations. Our In addition, there was a $5.4 million reversal reflect the current and expected higher oil March 2026 $369.8 million (2020: $308.7 million), after
Taskforce on Climate-related Financial Leadership Team, led by our CEO, take a We already incorporate climate risk within of decommissioning obligation no longer price environment. accounting for tax payments of $12.9 million
Disclosures (TCFD) in mid-2022. This will put hands-on approach in the implementation of our risk management framework but required for Eland operations in the period. • Maintain optimal balance of cash (2020: $10.4 million) and a hedge premium
us ahead of new regulatory requirements in our energy transition agenda, with the CEO recognise that climate change and the Operating profit and debt of $9.0 million ($8.4 million). Free cash flow
the UK which direct listed companies like ours taking direct responsibility for managing and energy transition have become key drivers Gross profit The operating profit for the year was $250.7 for the period amounted to $200 million
to make TCFD-aligned disclosures from 2023. developing our response to climate-related for the global economy and for our business. Gross profit increased by 128.9% to million, compared to an operating loss of Value-creating M & A (2020: $163.9 million).
risks and opportunities. That is why, in the near future, we will adopt $285.2 million (2020: $124.6 million). The $31.7 million in 2020 (which resulted mainly
climate risk as a Principal Risk within our non-production costs primarily consisting from the $160.9 million impairment charges). • Seek low-risk opportunities The Group received $235 million from the
Enterprise Risk Register and why climate of royalties and DD&A totalled $270.9 million, for growth that enhance NAV major JV partner towards the settlement of
change considerations increasingly compared to $228.9 million in the prior year. During the year, the Group recognised and FCF cash calls. The major JV receivable balance
influence our strategic thinking, risk The higher royalties were the result of higher impairment losses totalling $38.1 million, now stands at $83.9 million, down from
management processes, and operations oil prices, and the DD&A charge for oil and which include financial asset charges of • Opportunity to consolidate Nigerian $107.1 million at the end of 2020.
on a day-to-day basis. gas assets increased to $141.1 million (2020: $22.6 million for outstanding receivables and market though acquisition of assets
$127.5 million), because of a higher depletion non-financial asset charges of $15.2 million divested by IOCs and distressed Cash flows from investing
rate applied following a reclassification and for the rigs. This was offset by the $74.7 small-scale operators activities
revision of previous 2P estimates compared million impairment reversal described above. Net capital expenditure of $136.4 million
Volume of oil spilled through own operations 0.0004 0.0091 0.0000093 to the prior year. consisted of $37.7 million towards completing
(Thousand tonnes) five development oil wells (Umuseti 07,
GB-06, 07, 08, 09) and $26.3 million for
Volume of oil spilled through sabotage 0.0014 0.002 Nil 0.0037 0.0007 completing two new gas wells (Oben 50, 51)
(Thousand tonnes) and two workover wells (Oben 44, 46).
Nil Nil Nil Nil Associated facilities and engineering costs
Groundwater contamination Nil 0.28 0.24 0.19 0.196 amounted to $72.4 million.
Freshwater consumption (MMbbls) 1.18
Total greenhouse gas Emissions N/A N/A N/A N/A N/A N/A 2.8 2.4
(MM tonnes CO2 equivalent) N/A N/A N/A N/A N/A N/A 0.0028
Scope 1 & 2
Scope 3 N/A
Read more72 SeplatEnergyPlc Annual Report and Accounts 2021 Annual Report and Accounts 2021 Seplat Energy Plc 73 Read more56 SeplatEnergyPlc Annual Report and Accounts 2021 Annual Report and Accounts 2021 Seplat Energy Plc 57
Page 72 Page 56
Annual Report and Accounts 2021 Seplat Energy Plc 5
Seplat Energy at a glance
Nigeria’s leading
independent
energy provider
Seplat is Nigeria’s leading indigenous, independent
oil and gas producer, delivering a working interest
production of nearly 29,091 barrels a day of liquids
for export in 2021, as well as 107.9 MMscfd of processed
natural gas for domestic power generation.
Gas
Seplat Energy’s gas business consists
of gas fields and associated infrastructure
in OML 4, which supports our 465 MMscfd
Oben Gas Processing Plant, and OML 53,
where our independent joint venture ANOH
Gas Processing Company is building a
300 MMscfd gas processing plant.
ANOH is one of Nigeria’s most important
strategic energy transition projects. Although
the plant itself will be completed in 2022,
delays to third-party infrastructure line mean
gas will now begin flowing to markets in 2023.
Proudly Nigerian Oil
Seplat Energy’s oil generated foreign currency Seplat Energy’s oil portfolio contributed 61%
income of $565 million for Nigeria in 2021. of Group volumes in 2021 and 84% of its
In this, we paid $86 million royalties and a revenues. We have operations across seven
further $44 million in taxes and levies. These blocks in the Niger Delta, our largest being
contributions support Nigeria’s economy,
including its healthcare and educational the combined operations of OMLs 4, 38 & 41.
systems and its creation of essential Read more
infrastructure. Page 46
At times, our gas powered up to 30% of Seplat Energy — Oil and gas production 2021 (boepd)
Nigeria’s domestic grid in 2021 and by
increasing gas production we can help to Oil
reduce Nigeria’s dependence on small-scale,
costly and polluting generators. In addition, 29,091
we spent $11 million supporting our host
communities, focusing on jobs and business
opportunities, security, medical and other
assistance during the Covid-19 pandemic.
Gas
18,602
6 Seplat Energy Plc Annual Report and Accounts 2021
OnitshaOnitsha Strategic Report 01—73
OMOLM40L 40Sibiri Sibiri OMOLM4L 4
OMOLM41L 41OpuamOapuama
SapeleSapele Oben Oben
OkwefeOkwefe
GbetiokGubnetiokun MosogMarosoOgkapr orhOukruporhuru
UbalemUebalemAemukpAemukpOeroghoOrogho
Ovhor Ovhor OMOLM38L 38
OkoporOokoporo
EscraEvsocsravos OMOLM53L 53UmuseUtim(Puilslaert)i (Pillar)
Jisike Jisike
WarriWarri OPLO2P8L3283IgbukuI(gPbilulakru) (Pillar) Ohaji Ohaji
South OSowuetrhri Owerri
IheomaIheoma
ForcaFdoorscados OdinmaOdinma Governance Report 74 — 138
EmeabEiammeabiam
AlaomaAlaoma
OmerelOumereluOwu Owu
Ubima Ubima
Port HaPrcoortuHrtarcourt
OMOLM55L 55 KrakamKarakama
Soku Soku Akaso Akaso
Ke Bonny Bonny
NembeNembe Dama Dama
BonnByonny
Oil & gas producing assets RobertRKoirbi ert Kiri Ke Financial Statements 139 — 260
Oil producing assets Inda Inda
BrassBrass BelemaBelema
Since our inception in 2010, we have built Additional Information 261 — 276
an energy business based upon hydrocarbon
production in the Niger Delta, exporting oil
that supports Nigeria’s economy and delivering
gas to power its homes and businesses.
Oil and gas blocks in the Niger Delta Proportion of Nigeria’s electricity grid Our portfolio
(4 operated directly) powered by our gas
Seplat Energy’s portfolio comprises seven
8 25%-30% oil and gas blocks in the prolific Niger Delta,
which we operate with partners including the
Staff Generated in revenue share for Nigeria Nigerian Government and other oil producers,
as well as a revenue interest in OML 55.
500+ $434bn
The blocks are connected to well-established
Boepd production in 2021 Paid in dividends to shareholders export routes and with the commissioning of
(29,091 bopd oil, 18,602 boepd gas) since listing the Amukpe-Escravos Pipeline, which serves
our major assets at OMLs 4, 38 & 41, we now
47,693 $400m have a more secure and reliable alternative to
the Trans Forcados System, whose outages
Annual Report and Accounts 2021 have previously impacted production.
Seplat Energy Plc 7
Chairman’s statement
Dr Ambrosie Bryant Positioned for just energy
Chukwueloka (‘A.B.C.’) Orjiako transition, sustainability
Non-Executive Chairman and transformation.
Distinguished Shareholders
I am delighted to welcome you all to the 9th Annual
General Meeting (AGM) of our Company, Seplat Energy
Plc. This AGM is, understandably, quite exciting as it
presents us with another opportunity to interact and
contribute positively to the performance of our company,
as we exit the Covid-19 pandemic.
Remarkably, this is also my last statement as Chairman
of Seplat Energy, after 12 years of serving on the Board.
Indeed, it has been an exhilarating journey for me,
made more rewarding because of your support and
cooperation in achieving all the enviable milestones
we have accomplished together.
The business environment post
Covid-19 pandemic
The global economy has recovered, almost to
pre-pandemic levels in some countries, especially,
the Organisation for Economic Co-operation and
Development (“OECD”) economies, following the
successes of the vaccination campaigns and lifting
of lockdowns. However, the recovery was challenged
late last year, following the increase in the number
of infections, owing to the Omicron strain. The global
economy grew by 5.9% in 2021 while the Nigerian
economy grew by 3.4% (World Bank). This is in stark
contrast to the negative growth rates of -3.6% and
-1.8% respectively in 2020, obviously due to the
Covid-19 pandemic.
In the World Energy sector, there was an unexpected
fast-pace of recovery, leading to unprecedented
demand-growth for energy, which challenged the supply
side. A combination of climate change activism and
climate change/Energy transition policies together with
declining investments caused severe supply losses in
the face of bullish demand growth. This has resulted in
the rising global commodity prices we witnessed towards
the end of the year. On a positive note, the Nigerian oil
and gas sector received a major boost in 2021, with the
passage of the Petroleum Industry Act (PIA) which is
expected to drive new investments into the sector.
8 Seplat Energy Plc Annual Report and Accounts 2021
Products and crude oil inventory draw from • The Successful Initial Public Offering and • The 2019 acquisition of AIM listed Eland Oil Strategic Report 01—73
OECD countries grew to their highest levels dual listing on the Main Board of the Nigerian and Gas. Eland held participating interests
since 2015, while global oil demand reached Stock Exchange (now Nigerian Exchange in OML 40 and Ubima marginal field. Governance Report 74 — 138
pre-pandemic level of 99.6 MMbopd and Limited (“NGX”) and the Main Market of the
growing. The average Brent oil price in 2021 London Stock Exchange in 2014 where we • Setting the Environment, Social and
was $70.7/bbl compared to $42/bbl in 2020. raised $535 million. Subsequent move to Governance (“ESG”) and Sustainability
the Premium Board of the NGX in 2018. Agenda.
This post-pandemic recovery was reflected in
the 2021 performance of our share price with • Development of appropriate pricing These achievements have set Seplat on an
the UK line opening the year at 66p per share framework for Domestic gas in Nigeria, to exponential growth trajectory, well positioned
and rising steadily to 83p per share at the drive our gas commercialization, which led to be the industry leader and to take on
end of the year. The Nigerian line opened to the creation of our midstream business, the challenge of providing sustainable and
at NGN402 per share and closed the year starting with our flagship Oben Gas Plant. reliable solutions to energy poverty in Nigeria.
at NGN650 per share.
• Our gas commercialization strides, which led In 2021, we changed our name to Seplat
Becoming Seplat Energy: to the creation of our midstream business, Energy Plc, to highlight our updated strategy:
our new strategic imperatives starting with our flagship Oben Gas Plant. to provide sustainable energy solutions
The Seplat journey began in 2009 with the for society. Our Vision is: To transform lives
incorporation of Shebah and Platform and • The 2015 acquisition of 40% interest in through energy, and we have a mission
took a further step with the execution of the Chevron assets (OML 53) with operatorship. to lead Nigeria’s energy transition towards
Sale and Purchase Agreement on 29 January This acquisition provided us the opportunity accessible, affordable and reliable energy
2010 with SPDC/Total/Eni, which ensured our to develop the ANOH project. that drive social and economic prosperity.
Landmark Acquisition of OMLs 4, 38 and 41.
This transaction was indeed the first of its • The first Incorporated Joint Venture (IJV) with
kind, where an indigenous operator acquired the NNPC in 2017 birthing the ANOH Gas
assets from leading International Oil Processing Company (AGPC) Limited, a
Companies (“IOCs”). midstream gas company committed to
processing gas from OML 53 for distribution
Seplat has subsequently grown from to the local market.
strength to strength, with many landmark
achievements on the journey to becoming Leading Financial Statements 139 — 260
Nigeria’s leading Independent Energy provider. Nigeria’s
Notable among these achievements are: energy Additional Information 261 — 276
transition
• Refinancing of acquisition cost in 2011.
• Development of the template for acquisition
strategy also in 2011.
• Funding Strategy for Seplat, including the
Credit line of $550 million led by AFREXIM
BANK, 2011.
• Recovery of 300 kbbls post installation of
flow meter in Q1, 2011 and 2 MMbbls of crude
oil from Shell following post installation of
LACT Unit also in 2011.
• Raised $1.6 billion from 9 banks (both
Nigerian and International Banks) for
ConocoPhillips bid round in 2012.
• Pre-IPO funding and Enterprise valuation
of Seplat to $1 billion 2012/2013.
• The 2013 acquisition of a 40% participating
interest (non-operated) in the Umuseti/
Igbuku fields (OPL 283) from Pillar Oil Limited.
Annual Report and Accounts 2021 Seplat Energy Plc 9
Chairman’s statement | continued
Consequently, our new strategy is centred Pillar 2 – Midstream Business: Pillar 3 – Renewables Business:
around energy transition and the mitigation
of energy poverty in our society. It is about We believe that gas will drive the energy W e believe that renewables are the future
providing the right energy mix for common transition and accelerate economic growth and alongside our gas-to-power
good, while preserving the environment. in Nigeria. Our midstream initiatives aim to developments, renewables will be critical
We are set to achieve this through three support the accelerated development of to providing an alternative to Nigeria’s energy
main pillars: Nigerian’s huge gas resources, to provide gap. This initiative is a combination of gas
the needed Gas-to-Power Solutions and and solar to leapfrog our Scope 1 and Scope
Pillar 1 - Upstream Business: address the deplorable grid electricity supply 2 Clean Energy Scheme, as well as create a
in Nigeria. We also aim to replace the use structured world-class profitable Renewables
We believe that the production and supply of diesel fired power generation with cleaner business. The main objective is to tap the
of crude oil remains crucial for Nigeria’s gas power generation, in the mini grid and entire energy value chain for Gas, while
development, but we must focus on off-grid landscape. jump starting available Renewable energy
improving efficiency and less carbon intensive opportunities, in the communities and
oil and gas operations that delivers revenue In addition to electricity supply, we are Industrial clusters.
to stakeholders in a cleaner and cost- addressing Liquified Petroleum Gas (LPG)
effective manner. We are leveraging available penetration for homes and Compressed Seplat Energy supports the goals of the
technology and innovation, as well as the Natural Gas (CNG) for industrial and Paris Agreement and is in step with
right policy framework to deliver on these. transportation use. The replacement of society’s objective to get the world to net
We are seeing significant improvements firewood and Household Kerosene (HHK) zero carbon emissions by 2050. However,
in emissions reduction. with LPG will deliver cleaner low- carbon net zero does not mean zero fossil fuels.
environment as well as remove the health The Climate Change Mitigation Plans and
One key target for us is to end routine flares hazards of fumes and carbon inhalation. energy transition narrative must recognise
(equivalent to about 2.8MT of carbon dioxide This LPG penetration initiative is well on the the severe energy poverty in Nigeria,
emission) in our fields by 2024, six years way to provide cleaner and lower cost source Africa and other developing regions.
ahead of the Nigerian Government’s policy for over 80% of energy needs at homes in Consequently, our huge gas resources
target, while monetising existing reserves. Nigeria. There is ample scope for gas-to- must be harnessed in solving energy
industry, and gas-to-agriculture as we poverty in Nigeria, by providing greater
support the diversification and growth access to affordable, and reliable energy
of the Nigerian economy. to drive social and economic growth,
as captured under the United Nations
Sustainable Development Goal - 7. The
energy transition initiative must, therefore,
be collaborative, just and equitable.
10 Seplat Energy Plc Annual Report and Accounts 2021
Business performance in 2021 Strategic Report 01—73
Our operational and financial performance in
2021 reflects the challenges of our business Governance Report 74 — 138
in Nigeria. Our average working interest
Refreshing of the Board in 2021 I would also like to mention that we were glad production was 47,693 boepd including Financial Statements 139 — 260
In my statement last year, I reported on to have attracted the calibre of Ms. Arunma 29,091 bopd of liquids and 107.9 MMscfd
several Board and Management changes Oteh, OON, who joined the board in 2020. of gas (18,602 boepd). The performance of
as we managed the transition to our new Ms. Oteh OON who was a former Director our oil business was impacted by two lengthy
Chief Executive Officer (“CEO”), appointed General (“DG”) of the Securities and Exchange shut-ins at one of the third-party operated
a new Chief Financial Officer (“CFO”) and Commission (“SEC”) and former Treasurer of export routes that we rely upon. This
strengthened the independence of the Board. the world Bank is not new to the Seplat Story underscores the need for alternative export
as she was the DG of SEC; under whose routes to mitigate this risk.
That process of refreshment continued watch Seplat was granted relevant approval
with the appointment of three Independent for our dual listing in the LSE and NGX. We drilled 5 oil wells and 3 gas wells during
Non-Executive Directors during the year: the year; the oil wells have a combined gross
Dr. Emma Fitzgerald, Professor Fabian Ajogwu, I would also like to thank those Independent potential of 17.5 kbopd and the gas wells have
SAN and Mr. Bello Rabiu. Dr Fitzgerald brings Non-Executive Directors that retired during a combined gross rate of 130 MMscfd of gas
knowledge and experience in important the year: Mr. Damian Dodo, SAN and Lord and 5.2 kbpd of condensate. I am particularly
areas such as the energy sector, renewables Mark Malloch-Brown, MBE, who diligently proud of our strong safety record which saw
and sustainability; Professor Ajogwu SAN is served the Board and made significant us reach 24 million hours without any Lost
a Corporate Governance expert and leader; contributions towards the growth of the Time Injury (“LTI”) from our operated assets
and Mr. Rabiu has an unrivalled knowledge Company during their seven-year tenures. in 2021.
of the Exploration & Production industry in The Board also received the resignation of
Nigeria, having had a distinguished career at Mr. Xavier Rolet, KBE in November 2021, and We introduced hydrocarbons into the
the Nigerian National Petroleum Corporation. that of Mr. Austin Avuru, as a Non-Executive Amukpe-Escravos Pipeline (AEP) and are
Director (“NED”) with effect from 1st March poised to launch this alternate export route
2022. On behalf of the Board, I would like to which will enable us to evacuate up to 40
thank these gentlemen for their contributions kbopd gross from our OMLs 4, 38 and 41.
to the development of Seplat during their This is an achievement worthy of note.
respective tenures.
This performance translated into revenues
of $733 million and adjusted earnings before
interest, taxes, depreciation and amortization
(“EBITDA”) of $372 million, up 38% and 40%
respectively, from 2020, as our business
recovered from the worst of the Covid-19
pandemic.
Our cash position remained strong as we
ended the year with $341 million in cash and
a net debt of $426 million. We have certainly
delivered on that vision of building a business
that is now the leading Nigerian independent
and a major provider of natural gas to the
domestic market.
Additional Information 261 — 276
Annual Report and Accounts 2021 Seplat Energy Plc 11
Chairman’s statement | continued
Returning value to shareholders Sustainability – Seplat Energy’s As we work with a renewed mission to lead
through dividends strategic response for the future Nigeria’s energy transition with accessible,
Our robust operational performance, despite of our business affordable and reliable energy that drives
our operational challenges meant that we When we relaunched our strategic vision and social and economic prosperity, we remain
were able to meet our dividend commitment redefined our purpose during the SEPLAT committed to giving due priority to the issue
and, with the Board having approved a Q4 ENERGY SUMMIT in October 2021, we went of sustainability in all our operations. We
dividend of $0.025 per share, we once again beyond just a change of name from Seplat repositioned, refocused, and rebranded the
returned $0.10 per share to our shareholders Petroleum Development Company Plc to Company in 2021 with a redefined purpose,
for the 2021. Since we raised $535 million at Seplat Energy Plc, we also unequivocally new vision, mission and core values, to reflect
our initial public offering in May 2014, we have demonstrated our commitment towards the essence of Seplat as an energy solutions
returned over $400 million to shareholders in sustainability. Our belief in and focus on provider. Today, Seplat Energy is better poised
the form of dividends. sustainability has contributed to the to take advantage of existing and emerging
achievements we have made and the strong opportunities in Africa’s largest economy.
Support for our communities foundation we have laid, as the leading With the vast gas resources in Nigeria, a
In 2021, we continued with our social indigenous independent energy company huge supply gap in the power sector, and
impact programmes investing $1.06 million in Nigeria given our short history. Sustainability a growing population, we see an exciting
in health programmes, $1.06 million in reporting provides a good platform to future for the Company in exploiting these
Education programmes, $1.99 million in evaluate our ESG performance and ensure opportunities to drive Nigeria’s energy
economic empowerment programmes we are on track in making meaningful transition and help steer the country
and $7.4 million in community infrastructure contributions towards the achievement of towards sustainable development.
development projects. our business aspirations and the Sustainable
Development Goals (SDGs). We are in the
We remain committed to the wellbeing of our process of developing a robust ESG strategy
host communities and continue to provide which will also enable us to develop a full
health and education programmes, as well scale business in carbon offset and carbon
as opportunities for training and employment. credit. We are soon launching the “Tree 4 Life”
This includes support for dealing with the Initiative, through which we would be
Covid-19 pandemic, as we did in 2020, sequestering huge amounts of CO2 from
although the pressure on this front has the atmosphere.
relented in recent months. As it does, we
will refocus on the long-term projects we
have undertaken in our host communities.
In October 2021, we launched the Seplat
Women’s Awesome Network (SWAN) under
the Seplat Gender Diversity program. SWAN
has been created as part of the Company’s
sustainable business approach and to
spearhead its contribution towards the
achievement of Sustainable Development
Goal 5 to achieve gender equality and
empower all women and girls. At Seplat, we
recognise that achieving gender equality
requires intentional action and deliberate
policies, and are rolling up various policies and
initiatives into a Diversity and Inclusion (D&I)
Framework that is benchmarked nationally
and globally. The Launch of SWAN, as a
resource group for women, is the first of
many initiatives of the Diversity and inclusion
initiative which enjoys the unreserved support
of the board of directors and management of
Seplat Energy.
12 Seplat Energy Plc Annual Report and Accounts 2021
My decision to retire as Chairman Strategic Report 01—73
and Director of Seplat Energy
Outlook for 2022 The acquisition will also provide significant In fulfilment of a promise we made long Governance Report 74 — 138
The year 2022, marks a major turning point for undeveloped gas potential of 2.9 Tscf, ago to have an Independent Non-Executive
Seplat Energy. It is the year that will usher in a which could pave the way for the Company Chairman, I decided that it was essential Financial Statements 139 — 260
new Governance era, following the retirement to expand domestic production and export to retire from the Board and as Chairman
of the founding CEO, Mr. Austin Avuru, two opportunities. It will also provide Seplat of Seplat Energy Plc. It is therefore a promise
years ago and my retirement as the founding Energy with dedicated and secured export kept in the overall interest of the Company.
Chairman from the Board after this AGM. It is routes which would further reduce the risk I have now served as Chairman of Seplat
also the year in which Seplat Energy is set to profile of our business. Energy for 12 years and it has been an
complete the transformational corporate honour and a privilege to do so. I am proud
acquisition of the entire share capital of Seplat Energy is fully committed to working of what we have been able to achieve, as
Mobil Producing Nigeria Unlimited (“MPNU”) with the Nigerian Government to bring these we established ourselves as the largest
from Exxon Mobil Corporation, Delaware strategically important national assets fully indigenous independent energy company
(“ExxonMobil”) (“Transaction”), having been into Nigerian ownership alongside the NNPC. in Nigeria through operational excellence,
adjudged preferred bidder in a competitive the acquisition of eight oil and gas assets,
process. The Transaction, which is subject As we work with a renewed mission the expansion of our domestic gas business
to Ministerial Consent and other required to lead Nigeria’s energy transition and the dual listing on both the Nigerian
regulatory approvals, encompasses the with accessible, affordable and and London Stock Exchanges, the first
acquisition of the entire offshore shallow water reliable energy that drives social by a Nigerian company.
business of ExxonMobil in Nigeria, which is and economic prosperity, we
an established, high-quality operation with remain committed to giving due These achievements are down to our excellent
a highly skilled local operating team and a priority to the issue of sustainability team and our strong, collaborative relationships
track record of safe operations, producing in all our operations.” with our stakeholders. With the recently
95 kboepd (W.I.) in 2020 (92% liquids). announced proposed acquisition, we are
going to be in an even better position to drive
Upon Completion, the acquisition will create transformational growth and profitability for all
one of the largest independent energy our stakeholders, meet our vision of delivering
companies on both the Nigerian and London Nigeria’s energy transition and become the
Stock Exchanges, and bolster Seplat Energy’s Nigerian energy champion. I am leaving the
ability to drive increased growth, profitability Board of Directors with a sense of fulfilment,
and overall stakeholder prosperity. This will not only in co-founding Seplat Energy, but
be a transformational acquisition for Seplat also steering it to an enviable position.
Energy, increasing our production by 186%
and 2P oil reserves by 170% (based on 2020 I sincerely thank my colleagues on the Board,
numbers). both past and present, the Management
and entire Staff of Seplat for the invaluable
support, commitment and dedication to duty, Additional Information 261 — 276
which brought us this far. As I step down from
the Board, I trust that you will continue to build
on this legacy and propel Seplat to even
greater heights.
I also wish to thank you, our Shareholders,
for your abiding faith in our ability to manage
and grow your investments. I urge you to
kindly extend the same unflinching support,
which you so graciously afforded me, to the
incoming Chairman and the Company.
Thank you and God bless you.
A.B.C. Orjiako
Non-Executive Chairman
Annual Report and Accounts 2021 Seplat Energy Plc 13
Becoming Seplat Energy
Our purpose:
To deliver sustainable energy
solutions for society
Nigeria is a nation with limitless potential. Its transition
to sustainable, affordable energy will be transformational,
empowering every person, business and community to thrive.
At Seplat Energy, we are making this future a reality. Our new
brand identity and name solidifies this commitment and
signals a transition for our business and Nigeria as a whole.
Exciting future ahead Seplat Energy will be at the centre
of Nigeria’s energy transition
We changed our name to Seplat Energy to Three core beliefs will guide our strategy and business development
reflect the exciting future ahead of us as a as we lead Nigeria’s energy transition:
supplier of a more diverse range of energy
products in what will soon be one of the 1. Oil will remain vital to Nigeria’s economy because of its
most populous countries on Earth. contribution to government revenues, which fund the nation’s
day-to-day activities as well as its future development
The greatest business opportunity we have
is to supply the right mix of energy to support 2. Gas will provide cleaner, lower-cost energy that will in turn help to
Nigeria’s growth. In doing so, we must diversify and boost the economy and provide essential baseload
also look to reduce global CO2 emissions, to support future renewables
enter the renewable energy market, make
a positive social impact in Nigeria and 3. Renewables are the future, for Nigeria and for Seplat Energy
contribute to its achievement of the United
Nations’ Sustainable Development Goals. Oil remains Gas will
crucial for drive energy
The transition to gas is imperative. Too Nigeria’s transition and
much hard-earned Nigerian money is spent development development
importing diesel to run the inefficient and
polluting generators that power Nigeria’s Seplat
homes and business operations. This alone Energy
is a huge opportunity, with the potential to
convert more than 20GW of energy Renewables
generation from imported diesel and petrol to are the future
Nigerian gas, just to satisfy existing demand.
Beyond that is the need to increase energy
access from less than 60% at present, so we
can provide universal access to reliable and
affordable energy for twice as many Nigerians
in the future, and let them use it to power their
entrepreneurial spirit.
14 Seplat Energy Plc Read more
Page 24
Annual Report and Accounts 2021
Our vision: The values that drive us: Strategic Report 01—73
Transform lives
through energy. Safety Governance Report 74 — 138
Our mission:
Leading Nigeria’s energy We will prioritise safety, which is a matter
transition with accessible, of both individual and collective responsibility.
affordable and reliable
energy that drives social Integrity
and economic prosperity.
We will behave with integrity in all our dealings.
Partnership
Our ambitions will be driven by partnerships,
so we strive to collaborate and be a trusted partner.
Ambition
We will be a driving and innovative force in the delivery
of energy solutions, for social and economic growth.
Agility
We strive to be an efficient organisation, proactive
and adaptive to changes in our environment.
Financial Statements 139 — 260
Additional Information 261 — 276
Annual Report and Accounts 2021 Seplat Energy Plc 15
Market
Improving access
to energy is Nigeria’s
transition imperative
Nigeria represents a huge market
opportunity for Seplat Energy,
both in today’s hydrocarbon-based
economy, and in the lower-carbon,
renewable world of the future.
Market overview A land of opportunity…
With a population of 200 million projected to double Population
by 2050, improving access to energy is Nigeria’s
transition imperative. At present, only an estimated • Africa’s largest population, with more than 200 million people
57% of Nigerians have access to electricity, meaning and growing rapidly
there is significant potential for growth just to serve
our existing population, let alone a future population • Currently 7th largest, will be the world’s 3rd largest country in 2050
that could be twice as large as today. and second largest democracy
Fortunately, our country is blessed with abundant • More children are born every day in Nigeria than in the whole of Europe
hydrocarbon energy resources that are close to
major population centres, with well-proven geology Estimated growth in Nigeria’s population
that is being tapped by a long-established industry,
supported by good infrastructure and regulatory and 2050 401,315
fiscal regimes. Furthermore, Nigeria is also blessed 2045 364,712
with plentiful sunshine, especially in the North where 2040 329,067
gas and electrical grid infrastructure is scarce, as 2035 294,986
well as great potential for wind and hydro-electric 2030 262,977
development. 2025 233,343
2020 206,140
But there are impediments. The national grid is
undeveloped, power blackouts are frequent, and Source: UN Population Division, Probabilistic Population Projections, 2019
of a potential 12GW installed generating capacity, it is
estimated that as little as 2-3GW actually reaches the Economy
customer. Of those with access to electricity, most are
reliant on small-scale, inefficient and expensive diesel In its World Economic Outlook, published in October 2021, the
or petrol generators, resulting in the world’s highest International Monetary Fund predicted that Nigeria’s economy would
cost of energy in the world at 52 cents per kWh. double in size between 2020 and 2026 (constant prices, US dollars).
In addition, some 80% of Nigeria’s total energy use Growth in Nigeria’s GDP (US$bn)
is biomass for cooking, which creates significant
problems of deforestation, land erosion and 2026 922
particulate pollution.
2025 813
Nigeria’s transition priorities represent significant
opportunities for Seplat Energy: develop gas-to- 2024 717
power to improve energy access; develop LPG
markets to alleviate use of biomass; and develop 2023 635
renewable energy to serve large areas of the country
not currently served by the national electricity grid. 2022 555
2021 480
2020 429
2019 448
Source: IMF World Economic Outlook, October 2021
16 Seplat Energy Plc Annual Report and Accounts 2021
Strategic Report 01—73
NIGERIA’S ABUNDANT Governance Report 74 — 138
ENERGY RESOURCES
Nigeria’s power 12,522
infrastructure challenge Bbl liquids
Nigeria’s power system suffers an -5,381 Financial Statements 139 — 260
imbalance between generation 37bn
and consumption. Across the 3,879 3,592
value chain, from power -3,262 Reserves remaining without addition
generation to transmission and -287 -447 1,864
distribution to the end user, -1,065 40 years
infrastructure deficit is a major
challenge that has affected Installed Average national daily production in 2021
Nigeria’s grid electricity supply. capacity
Severe bottlenecks mean that Non-available 1.5 Mbopd
power stations are not operating capacity
optimally, distribution is inefficient Non-operational Estimated gas reserves
and energy losses are high, even capacity
before companies attempt to bill Operational 203 Tcf
customers and collect payments. capacity
Transmission Electricity that current gas production
of 8 Bscfd could power
losses
Capacity 8GW
transmi ed
Distribution Direct solar irradiation
losses 1.8-5.0kWh/m
Commercial
Total potential hydro
losses
Capacity 14GW
distributed
Source: Nigeria Power Baseline Report.
Nigeria’s use of gas 5% Additional Information 261 — 276
The chart reveals the unfortunate 8%
fact that Nigeria’s abundant
gas resource is not being used 9%
efficiently. Although some 41% 10%
of gas is exported, generating
valuable foreign currency, more
gas is wastefully flared than used
for power generation in Nigeria.
Exports 41% 41%
Reinjection
Flared 27% 27%
Power generation
Producer use 10%
Industry 9%
8%
5% Source: Nigeria Power Baseline Report
Annual Report and Accounts 2021 Seplat Energy Plc 17
Market | continued
Addressing Nigeria’s
demands for reliable energy
Nigeria has one of the lowest rates of
electrification in the world and among the
lowest per-capita consumption of electricity.
Most power is provided by small-scale,
inefficient and polluting diesel and petrol
generators. At Seplat Energy, we are
committed to displacing these generators
with large-scale gas power projects and
to leading the country’s deployment of
renewable energy technologies.
Gas contribution to volumes in 2021 Gas volumes and revenue 250
200
39% 30,000 150
100
Gas contribution to revenue in 2021 25,000 50
0
16% 20,000 2021
Gas sales volume in 2021 15,000
39.4 Bscf 10,000
5,000
0
2013 2014 2015 2016 2017 2018 2019 2020
Volumes (boepd) Revenue
Nigeria’s growth potential 2021—2040
At our Capital Markets Day in July 2021 we presented
forecasts of energy growth in Nigeria, prepared by Wood
Mackenzie, the energy consultants. What they predict is
significant growth in all aspects of Nigeria’s energy usage
by 2040, with total demand more than doubling as the
population increases and access to energy improves.
Wood Mackenzie predict strong growth in gas-to-power,
both on and off the grid, and an especially bright future
for solar energy, which requires much less national
infrastructure if solar farms can be located close to
centres of demand. At Seplat Energy, we intend to be
at the forefront of these growth markets, providing the
right mix of energy for Nigeria’s future needs.
18 Seplat Energy Plc Annual Report and Accounts 2021
The greatest business opportunity Strategic Report 01—73
ahead of us is to supply the right mix
of energy to support Nigeria’s growth.
Energy access will drive Nigeria’s development Governance Report 74 — 138
Increasing access to energy is a priority for Nigeria’s economic and social
growth – and for Seplat Energy. As with any infrastructure build-out,
improving energy distribution will have multiplier effects on the economy
that will inevitably feed back into greater demand for energy. Our aim is
to support this growth by becoming a major supplier of affordable, reliable
and sustainable energy to our nation’s rapidly growing population.
Nigeria’s energy 5 6 1 Financial Statements 139 — 260
transition journey 4 2
Increase energy access to achieve 3
universal coverage and drive social
and economic development Additional Information 261 — 276
Achieve a ‘Just Transition’ using Nigeria’s
gas resources to replace imported
diesel, reducing economic burden,
improving GDP and reversing FX drain
Increase use of renewables to
exploit abundant sunlight, wind
and hydro resources
Reduce greenhouse gas emissions
to meet the 2050 Paris objectives, and
reduce particulate pollution from diesel
and biomass
Transition cooking from firewood to
gas, preserving the natural environment
and reducing deforestation
Impediments 1 2 3
• Highest cost of energy in the world over Increase gas supply Electricity supply Householders and businesses
(52c/kWh) because most power is for energy generation, becomes cheaper save money which they use
generated by inefficient, small-scale displacing diesel generators and more reliable for other economically
diesel and petrol generators productive uses
• Low access to energy (57%) because 4 5 6
of lack of grid infrastructure, especially
in rural areas GDP, business profitability Business and Demand for reliable
and household wealth households increase energy increases
• Despite around 12.5GW installed capacity, improve energy usage
only 2-3GW reaches customers
• 80% of energy use is biomass for cooking
Annual Report and Accounts 2021 Seplat Energy Plc 19
CEO interview
Roger Thompson Brown
Chief Executive Officer
With a new name and new strategy, the
future is bright for Seplat Energy, according
to Chief Executive, Roger Thompson Brown.
How would you summarise Why become Seplat Energy?
the year for Seplat Energy?
It’s clear that Nigeria needs to be part of
Oil prices were significantly higher in 2021 the global transition away from fossil fuels
so we had a stronger year financially, towards cleaner and renewable energies,
despite a shut-in at the Forcados Oil but it needs to be a Just Transition and
Terminal during Q3, which constrained conducted at an appropriate pace.
our production and brought us in just below
the volume guidance for the year. Revenues Clearly, the country is heavily dependent on
were up 38% at $733.2 million and this oil revenues and diversifying its economy
translated into an EBITDA of $371.8 million away from these will take some decades.
and operating cash flow of $394.3 million.
Nigeria is also blessed with huge gas
However, more significantly, we saw progress reserves and needs to deploy these as
on several projects that are important to our quickly as possible to replace all the diesel
future: the Amukpe-Escravos Pipeline was it’s importing to generate electricity, and
commissioned, meaning we are no longer to provide additional power to improve
dependent on the Forcados export route; access to energy and support economic
the Sibiri exploration well in OML 40 was and social development.
successful and encountered 229 ft of net
hydrocarbon pay across eight reservoirs; We want to lead this transition to gas and,
and we’re making good progress building beyond it, begin to develop a strong
the ANOH Gas Processing Plant, which renewables business. So we will evolve from
will be a major revenue driver in 2023. being a company that simply extracts oil and
gas to one that can create and capture value
So 2021 was really about laying the foundation right along the energy chain, whatever the
for strong growth in 2022 and beyond, and source of that energy may be.
that was also demonstrated through the
change of name and new strategy we That’s why we decided to re-brand the
announced to take us forward. Company as Seplat Energy – it’s a signal
of our intent and how we see our future.
20 Seplat Energy Plc Annual Report and Accounts 2021
Strategic Report 01—73
Governance Report 74 — 138
How does the new strategy Our change of name to Seplat We have to look after and respect our host Financial Statements 139 — 260
support this evolution? Energy reflects our belief that communities, help them where appropriate
the greatest opportunity ahead and offer them, as stakeholders, a chance Additional Information 261 — 276
The strategy we announced last July is of us is to supply the right mix of to share in our Company’s success.
based around two business imperatives: energy for Nigeria’s young and
Build a Sustainable Business and rapidly growing population and We also have to look after our environment,
Deliver Energy Transition. These are drive Nigeria’s transition to locally and globally, by reducing our impact
clearly interdependent and we can’t do cleaner, more affordable energy and especially our carbon emissions, by
one without the other. that is accessible to all.” improving the efficiency of our operations
and by creating more power from renewable
Sustainability is the first imperative, looking energy such as solar in the longer term.
after our society, our environment and our
finances. This is the bedrock of continuity We support the goals of the Paris Agreement
and progress on which we build the and are in step with society’s objective to get
operational strategy of delivering transition, the world to net-zero by 2050. We are now
which in return will allow us to strengthen capturing the data and doing the studies to
the sustainability of the business and share establish a comprehensive ESG baseline that
its success with our stakeholders. allows us to build a science-based pathway
that gets us to net-zero. As part of those
Our priority is to help improve access to plans, we are working to eradicate routine
energy across Nigeria, because this goal flaring at our operations by 2024, six years
drives the success of our business. Reliable in advance of the Government’s target.
and affordable energy helps other Nigerian
businesses expand, this in turn creates wealth We have also launched our ‘Tree for Life’
and that increasing prosperity feeds back tree-planting initiative across Nigeria to
into increased demand for energy. combat the effects of deforestation. As well
as the environmental benefits the programme
It’s a virtuous cycle as the energy will also create jobs, particularly in the rural
infrastructure builds out, drives economic areas which are heavily impacted by poverty.
activity and brings Nigeria up to global levels
of prosperity and energy consumption.
Annual Report and Accounts 2021 Seplat Energy Plc 21
CEO interview | continued
How do your operations Our energy transition priorities: How will this benefit Nigeria?
support this sustainability
drive? Achieve sustainable long-term Self generation of power in Nigeria is
growth by providing the optimal widespread and expensive. It significantly
We have set out a three-pillar strategy for energy mix for Nigeria increases the cost of living and doing
our operations on pages 22-23. The first business. The high cost of energy is a
pillar revolves around our upstream oil Be a national energy champion significant drag on the country’s economic
and gas business. For oil, the focus is on and partner of choice to support growth. Furthermore, it is estimated that
efficient, safe, low-cost extraction of our Nigeria’s energy transition only 57% of the population has access
existing reserves so we can recycle those to electricity which creates significant
profits into growth opportunities, into the Drive social and economic social issues, holding back development,
communities where we operate and into development through direct education and healthcare.
shareholder returns. and indirect efforts
Energy access will drive Nigeria’s
With upstream gas, we see it as the key Prepare for a lower-carbon world development and improve the lives of its
transition fuel and so its development is requiring different products people and Seplat Energy aims to be at the
essential to Nigeria’s future prosperity. and skillsets in our Company forefront, driving that process. Nigeria has
Nigeria will need significant gas production a huge gas resource of 203 Tcf and using
to support its journey to a low-carbon future, Achieve significant reductions these gas reserves to bring affordable,
because it has the potential to displace in corporate emissions reliable power to the entire population will
higher emission fuel sources such as diesel, have massive economic and social positives
coal and wood, which actually is Nigeria’s Read more while also driving Nigeria’s journey away from
primary source of energy. Gas will provide more polluting fuels like diesel and coal.
baseload power long into the future, even Page 24
when we have renewables. Nigeria’s gas will not only underpin the
country’s growth and future energy provision
Pillar two is to expand the Midstream Gas but it will also be crucial to the international
processing business. Seplat Energy is already gas market. The opportunity to export gas
the second biggest domestic gas business in is immense and with its huge gas reserves,
the country and when ANOH comes onstream Nigeria can play a major role in global gas
we will be the biggest gas supplier in Nigeria. supply, earning export revenues that will
help the country’s growth.
Also under this Midstream pillar is our
ambition to extend down the gas value chain
and look at gas-to-power opportunities and
move into LPG, CNG and LNG opportunities.
For example, a transition to EVs in Nigeria is
not a realistic prospect in the foreseeable
future but replacing petrol and diesel with
LPG would be achievable and deliver
a meaningful reduction in GHG emissions.
We continue to invest heavily in expanding
our domestic gas business in line with the
government’s strategy to achieve universal
access to electricity, and to make that energy
cheaper and cleaner by replacing diesel
generation.
Soon, we will begin to develop a third pillar
for the business, which will see Seplat Energy
invest in renewable energy projects,
predominantly solar power, at scales that
are appropriate for the business and for the
country’s needs – utility scale and smaller
off-grid arrays close to towns and other
demand centres. In fact, we think a
combination of gas for baseload and solar
for daytime energy is the most exciting way
forward for Seplat Energy.
22 Seplat Energy Plc Annual Report and Accounts 2021
Our unwavering commitment Strong corporate governance will enable What does the acquisition say Strategic Report 01—73
to Nigeria’s energy future and to our future growth, by giving investors the about Seplat Energy?
provide energy for Nigeria’s future confidence to back our ambitions, and by Governance Report 74 — 138
creates a virtuous circle: a giving us the credibility to negotiate with It says we’re ambitious in our desire to become
growing economy, a stronger international oil companies as they look to exit a major energy player on the world stage, and Financial Statements 139 — 260
society and new opportunities Nigeria, as we have done so successfully with we can achieve that just by serving Nigeria’s
for all to prosper, together.” Exxon Mobil and MPNU. In the future, this year future needs. It also demonstrates that we Additional Information 261 — 276
will be seen as a key point in Seplat Energy’s are a highly credible company, well governed
How do governance and journey – the year we moved from being a and prudently managed in a way that gave
corporate values drive mid-cap E&P to start the transition into a a syndicate of international financiers the
the strategy? Nigerian energy champion. The strengthening confidence to back our vision. They recognise
of corporate governance and the increased that we have good relationships with our
Strong governance enables the strategy, independence of the Board is a central part government partners and that we’re
along with good risk management. of this journey. committed to the best possible stewardship
On a day-to-day basis, that strategy is of these resources – they’ll be owned by a
underpinned by our values of safety, How does the proposed Nigerian company and operated by Nigerians
integrity, partnership, ambition and corporate acquisition of for the benefit of Nigeria.
agility, which guide the way we conduct MPNU support the strategy?
our business. What is the outlook for
Our Board has evolved and been It delivers significant impacts across all of the Seplat Energy?
strengthened and this is a natural step for pillars of our strategy to Build a Sustainable
any company as it grows and matures from Business and Deliver Energy Transition. Firstly, The energy industry in Nigeria has a bright
a founder-led enterprise to a more outward- it more than doubles the size of our overall future and as Nigeria’s indigenous energy
looking company operating in global markets reserves and nearly trebles production on leader we are going to be powering the
and capable of meeting global expectations. a pro-forma 2020 basis, and these new country’s energy transition and future
In line with this thinking, the Chairman notified upstream assets are in shallow waters prosperity.
the Board that he will step down at this AGM offshore, with their own dedicated export
and make way for an Independent Chair, who routes and terminals. We are the only Nigerian energy company
will, of course, be an eminent Nigerian. listed on the Main Board in London and on the
So the addition of Mobil Producing Nigeria Premium Board in Lagos, we have a strong
Unlimited’s four blocks diversifies our portfolio track record and access to international
and gives us greater security in our exports, sources of capital, and we believe we are the
which in turn delivers greater revenue best-placed Nigerian operator to replace IOCs
assurance compared to our onshore as they exit their onshore and shallow water
operations, and the immediate increase in assets, so we’ll continue to look at assets as
sales will help us generate significantly higher they become available, but obviously we will
revenues and cash flows that assure our be most of all focused on the task of bringing
financial sustainability, our ability to invest, pay MPNU into the Seplat Energy family.
taxes and generate returns for stakeholders.
We intend to develop the onshore assets
Furthermore, what MPNU also brings is a we’ve owned for years, develop the assets
huge and as-yet undeveloped gas resource we’ve acquired with MPNU and create new
of 2.9 trillion cubic feet working interest. opportunities in renewables and other energy
We will draw up a plan to tap this immense products. This is how we’ll Build a Sustainable
resource and seek approval from our Board Business and Deliver Energy Transition and
to implement it. What we’ll do is look at gas if we can become the largest energy provider
exports into the global LNG market, which in a country with a population expected to
will generate foreign currency income, and exceed 400m by 2050, that will make Seplat
also look at how we can develop gas for the Energy a truly global force.
domestic gas-to-power market and other
local markets as well. Roger Thompson Brown
Chief Executive Officer
Of course, we recognise that these offshore
assets have been flaring gas and this is
something we’ll look at addressing as quickly
as possible, so we’ll develop plans to use and
monetise this gas more effectively instead of
just burning it away.
One of the most important benefits of the
MPNU acquisition we propose is that we’ll be
joined by more than a thousand very highly
trained staff, who are experts in offshore
operations and trained to the very highest
levels of safety. We’re really looking forward to
welcoming them and will work to ensure the
smoothest onboarding possible, even though
our plan is to run MPNU as a standalone entity.
Annual Report and Accounts 2021 Seplat Energy Plc 23
CEO interview | continued
Our new strategic framework
In July we outlined a strategy through which the newly
renamed Seplat Energy will lead Nigeria’s energy transition.
Replacing the existing five-pillar framework described on
pages 26 to 27, the new strategy will be developed and
implemented in 2022 based upon the imperatives to Build a
Sustainable Business and successfully Deliver Energy Transition.
STRONG GOVERNANCE AND RISK MANAGEMENT
Our key priorities:
Build a DRIVE SOCIAL DEVELOPMENT FOCUS ON ENVIRONMENTAL
Sustainable CARE & REPORTING
Business Make a positive impact on communities
through improved access to energy, Minimise our impact on local and global
opportunities for local employment and environments, drive improvements where
suppliers, and initiatives that foster possible, commit to global standards and
entrepreneurship, education, health transparently report our progress.
and resilience.
Key initiatives: Key initiatives:
– Increase community employment – Achieve significant reductions
and content in emissions
– Foster local entrepreneurship – Establish comprehensive ESG baseline
– Improve healthcare and education
– Improve access to energy in local to guide policies and targets for reduction
– Report Scope 1 & 2 emissions as
communities
soon as possible
– Report under TCFD framework in 2022
– Develop policies for biodiversity
and water
MAXIMISE RETURNS
Deliver Energy UPSTREAM MIDSTREAM GAS
Transition
Develop our Upstream business by Development of Nigeria’s gas resources
selectively expanding our asset base, to accelerate the replacement of diesel
optimising the gas/oil mix, increasing and biomass and support economic
production, reducing costs and carbon growth through the supply of reliable,
intensity, and increasing revenue low cost energy. Gas-to-power provides
assurance by diversifying routes to market. baseload electricity to support renewables.
Key initiatives: Key initiatives:
– Increase utilisation of existing gas plants
– Monetise reserves – Deliver ANOH successfully
– Diversify export routes – Develop new gas markets, e.g. business
– Operational efficiency
– Cost control / Technology parks, universities
– Decarbonise field operations – Develop LPG products and distribution
– End routine flares
– Asset integrity & safety channels
– Efficient project delivery – Develop Compressed Natural Gas
products for vehicles
UNDERPINNED BY: INTEGRITY, PARTNERSHIP, AMBITION, AGILITY
SAFETY
24 Seplat Energy Plc
Annual Report and Accounts 2021
These imperatives will be enabled by Strategic Report 01—73
strong governance and risk management,
underpinned by our values.
Overall strategic results: Governance Report 74 — 138
FOR ALL STAKEHOLDERS Aligning KPIs and risks
Having defined the strategic framework to
Manage our finances prudently, pay our take Seplat Energy forwards, our next step
share of taxes and royalties, service debt, will be to develop key performance indicators
invest for the future, and return dividends and risk metrics that will align our day-to-day
to shareholders. activities with the overall strategic goals. This
will ensure that everyone in Seplat Energy is
Key initiatives: Increasing access well aware of what is required of them, how
– Remain the partner of choice for efficient to energy their performance will be measured, and how
to understand and quantify the risks to the
and responsible stewardship of Nigeria’s Reducing new strategic goals. For the purpose of this
hydrocarbon assets emissions 2021 Annual Report, all KPIs and risk metrics
– Diversify the business against oil will relate to our previous five-pillar strategy,
price volatility which is described on pages 30.
– Maintain prudent cash and debt
management strategy Financial Statements 139 — 260
– Drive growth through astute capital
allocation
– Return cash to shareholders
NEW ENERGY
Achieve a world-class capability in
renewable energies, through the
development or acquisition of new skillsets
that open up new and profitable markets.
Key initiatives: Transforming Our 2021 Additional Information 261 — 276
– Selective entry to power the economy strategic framework
generation market This 2021 Annual Report measures
– Combine gas with solar
– Explore carbon offset markets performance and risks in the context of
– Ensure continued access to capital
the previous five-pillar strategy outlined
on page 26.
Strategy
CEO interview | continued A strategy in transition
Our new strategic framework These imperatives will be enabled by Strategic Report 01—73 On pages 24 we outlined the new corporate strategy
strong governance and risk management, that we launched at the Capital Markets Day in July,
In July we outlined a strategy through which the newly underpinned by our values. and so this 2021 Annual Report is based upon the
renamed Seplat Energy will lead Nigeria’s energy transition. existing five-pillar strategy described below, with
Replacing the existing five-pillar framework described on which we started the year under review.
pages 26 to 27, the new strategy will be developed and As already mentioned, we are realigning all aspects of
implemented in 2022 based upon the imperatives to Build a our operations, including the way we measure and
Sustainable Business and successfully Deliver Energy Transition. report them, with the new strategic framework, which
is based upon the imperatives to Build a Sustainable
STRONG GOVERNANCE AND RISK MANAGEMENT Business and Deliver Transition.
Our key priorities: Overall strategic results: Governance Report 74 — 138 Read more Strategic Report 01—73
Pages 24
Delivering on Build a DRIVE SOCIAL DEVELOPMENT FOCUS ON ENVIRONMENTAL FOR ALL STAKEHOLDERS Aligning KPIs and risks
the strategy Sustainable CARE & REPORTING Having defined the strategic framework to
Business Make a positive impact on communities Manage our finances prudently, pay our take Seplat Energy forwards, our next step
through improved access to energy, Minimise our impact on local and global share of taxes and royalties, service debt, will be to develop key performance indicators
opportunities for local employment and environments, drive improvements where invest for the future, and return dividends and risk metrics that will align our day-to-day
suppliers, and initiatives that foster possible, commit to global standards and to shareholders. activities with the overall strategic goals. This
entrepreneurship, education, health transparently report our progress. will ensure that everyone in Seplat Energy is
and resilience. well aware of what is required of them, how
their performance will be measured, and how
Key initiatives: Key initiatives: Key initiatives: Increasing access to understand and quantify the risks to the
– Increase community employment – Achieve significant reductions – Remain the partner of choice for efficient to energy new strategic goals. For the purpose of this
2021 Annual Report, all KPIs and risk metrics
and content in emissions and responsible stewardship of Nigeria’s Reducing will relate to our previous five-pillar strategy,
– Foster local entrepreneurship – Establish comprehensive ESG baseline hydrocarbon assets emissions which is described on pages 30.
– Improve healthcare and education – Diversify the business against oil
– Improve access to energy in local to guide policies and targets for reduction price volatility Financial Statements 139 — 260
– Report Scope 1 & 2 emissions as – Maintain prudent cash and debt
communities management strategy
soon as possible – Drive growth through astute capital
– Report under TCFD framework in 2022 allocation
– Develop policies for biodiversity – Return cash to shareholders
and water NEW ENERGY
MAXIMISE RETURNS Achieve a world-class capability in
renewable energies, through the
Deliver UPSTREAM MIDSTREAM GAS development or acquisition of new skillsets
Transition that open up new and profitable markets.
Develop our Upstream business by Development of Nigeria’s gas resources
selectively expanding our asset base, to accelerate the replacement of diesel
optimising the gas/oil mix, increasing and biomass and support economic
production, reducing costs and carbon growth through the supply of reliable,
intensity, and increasing revenue low cost energy. Gas-to-power provides
assurance by diversifying routes to market. baseload electricity to support renewables.
Key initiatives: Key initiatives: Key initiatives: Transforming Our 2021 Additional Information 261 — 276
– Increase utilisation of existing gas plants – Selective entry to power the economy strategic framework
– Monetise reserves – Deliver ANOH successfully This 2021 Annual Report measures
– Diversify export routes – Develop new gas markets, e.g. business generation market
– Operational efficiency – Combine gas with solar performance and risks in the context of
– Cost control / Technology parks, universities – Explore carbon offset markets
– Decarbonise field operations – Develop LPG products and distribution – Ensure continued access to capital the previous five-pillar strategy outlined
– End routine flares
– Asset integrity & safety channels on page 26.
– Efficient project delivery – Develop Compressed Natural Gas
Strategy
products for vehicles
Delivering on oABaertAiwOsehxnuusnhpabidrsssiatoacpiotntlswirshranprteeoegegaewtsadhtersdtlhfeaaeisuevyiautsmspei[ngonmXt2o-,adncyXp0nwershD]it2nl,eteiiltwa1hentihnddirAoeleicvtsttannhliheoutmrtenreeraudatduphTttinyn,anleereieewnalggsrawReCnaeyitredtsthaisdauvipitpetoterineohoreitwasdsnernatrtceta.elenorirMsygaiebrBliwbeawiceguvardenfkiicslredeiambenowtmedagrse.ploSeDauaowwslpuarl ausaoy,ottrwsnereainkpiittnsa,ehJhwtanucerbaldthystl,ieecoghfy Strategic Report 01—[xx]
the strategy RPaegaedsm[XoXre]
lsSetianradctienegignycinetdhpigatiteoninsowsuuespAhpfaorvircetaivbneeienondf eogpuueridnloedndegnb-tyteearnmcelreagamyrbcaitonimdonpcaotonnysbi.settehnet
Strategic pillars Increase our resources Iinmcprreoavseeitpsropdroufcittiaobnilaitnyd NDtreiagvneesrliioatpi’osgneansetrgoydrive nPuewrsuoeppporortfiutnaibtileesepwNotbsgvbaMabhotfnnfyyeeeihafMgelNdoetnnaOrtirreceirrseeeotioaggdriMhpclffrliniaieoyaatpfgltwLaysdstrbrhcre,iiec.oea5ilgsoalOTneil’snn3asusrncehbseeg’csaosprleviaeananhunmmarnrtnegtgigmedosoaerreiGrtelgrronswlcpiiseotrsoywealeptyetanwin3esoa,srtatrsos0dhwonhinnPtntt0ohudairroeitentleoolftrocfurMgbcsaciwwtonitpoesmrmeiiMoileuiarnsoilsvtolnpfrrsygnsfiidoddnsigr-cifconfeitbsursbfa2hiovndglececisig0veelmaniatteAPl2abiotytolcaerul3uN,ouabdoncmrhg.sngOiaai.culeimitgOpallnuenH,sngshrelstoueetiroacfiessnpprynlarsesrae’4otmtlcseeocniw6isldsaidt5e,sy,rh Banedhasvhearreesopuornssuibclcye,ss Governance Report [XX]—[XXX]
Description ••••••aalcaoehaircrBwconeecoounllonpetTERwHiPAaPavllcimcnolotlvdrrsolipeCslmtaraecniio ippwosgvoiugt2fussrosilthgpFgdooiohrrvbhuc0nttteinhrkseiDurimhnrreaentreoaast2o$eafaasrunssiirvnomtessrms1varruette1Srhnekeeaee3trteeoincenoidoceeeeridmdstoht0sopodgcstinteidninpoenoupaha oue2,iumaotmttlnestgrclapoaoigv8irdnnovhszaa,mshtmtenoniaheeeidtoenlnttmtlurwimrsiasreioernroiuindeuesccndresi$ixdviubtiarnesnilstcitanniliecese4svivhttls,wioiebeanoviteisaesii0nbmotadnyonhsdiyc,ansrrlae0ouEyceeuorstokeheifeshSnosaiSrf feenrnnecsnemnioideyrxanwsonGrdgtygmoegrItaeupkPnegriidcosatnalipagplsrltaiildehOtnilnaoceshatollogitfareenreachoetificvmlbnitroewsniadbstenireentErofau,.rmsii,ioumsdnilsainsnuauSttotstcteatihro-aghybeevnnnuipioumrfdnntr.ofoefarnltddaipsneemmieWiogeganvurystttepiorcesnmybetiraw,tsemdmt2erioofthsea.ollsLsnet0eeootnWrodTsuiotihettnnmo2taroglniIodidkansetvdu2nfoeippietegtanrsdonygtlltrgoiiuesnnryir.dtggeyr
rsapagitpttWeptfoooehudxlrrrrspseooooepcmaadooewsdgclcsuimosrtpairuesqnpivtarsoexhcuuasocusimnibc.tssrtmiriirideriWeotltfosomeesueiacnnfsp.aelunetsoe,Oppihnwnteeusanuooahudtwseisearrtmtyrrieeetlcntlgdlodsaausnapgsrtrofnseenatoofpeuisetveriatectlirpvdeieytrxiolenaaeyptlirorronsssareliaseillfbstlip.beapoiwpaifenFofmirslifetled,ognehw.oEfllelHenedoulaniroelnnaeairscsonswefltncas,uowhrdtaaddtooriaswneeollsor,vpiolgnaoi-vtwueltnpwlrgrswoiernrtuieersshyr-orgcoim,kenecewwfptnsgsrouraroieseelsriilaunmesrtlmtosvteeaeoru.ivsnkset paptioOeiWeloammonmexxnnuporvsucoaaepppddrseesrhxjxooelssrwseevtriinammiecrrethsbamoittmtltrl,eiillliuinsouvrleasioemnofemigenencongcnuneaacentctiouettevxihlxeen,hpscpbotstiewsmgirtaoetmyrla.,uaioihmesnnItticmnmnsveohystateeidideadinthaaenmihmrrvpaeiiongmonryeooidnrrdrtt,csofgtdiload-egpvoafhwapetsieixarnrortysnotvapbesaititdnaeeicadrhodobsdtrgflepeioironauyienneltisp lpsstsccligviyvpsynbrsteaietneorifheouenharilrcgrrpobxadatugenetdrptsoscrgoydcircasaeeitanoeunopreontrv,csunetrgenlrewsd.vtccootcfOtlefuootetediwihculesrrinpnuanmeorlnlcdamtetocnrioensuo.aewtensdrnt.eonitostl,nt odaWtpIprfnaiwaNnneoesmnepooiicversgceasdamtrpeleueoeutdearsosfr-osdnrntrdoevwtitreaftgmifeietlinefsiitauaneosrsaigorremnlorhtlmeembiynmncionfitpnnyu,thipv-raeaslwesdeteaiprynsuojeoreofcreugasrrpdycidpreeonrrywuapiseuppemvmlrrcnuioaecnlericialnoeloidsrtrdneniyasitngfnmougineeeoaictttfnenbawsnrfcytpapiirbitiltqvgntanoasnoohieEleugrnsebcauetot&lesieyhiktlsrerwegiNntoPsoiifhlsstsrooteituinoy.oigichnoiaronmndawneo,kglued.tlrcrmhptooIortrfsnhaosDgoeocpi,pliswtyrdseaarcpohahtenlerstotaotnenbohcaesfmnrNsliotoeewltieottohnuinthwspgnanorn.aNaesngfrOiattoneruideigineourairereedsfr.sfrei,ar Financial Statements [XXX]—[XXX]
Progress
•• npPeTrinexehrrdsoepaeiejpcleror-waacvfrtriaeeteaiotsalltlidnoicwowsntSnaiivitiwtsbfhitoeiiedre3rnilrsl5(dcifilnl3oaroeilfsrudOltmisnngMiognterecoLrterlihyasea4estdAr0elyphmdewai2iggwoye0hhbri(2-tet2ehi2mo2)cw9iolp-fmibatthcenptaeinl,ertii)ttneiagdl ••••• Pwa3iAcFLaDnoooln8rmiflosoowrcdmarcadwuuksrrnmuukseestpdpcnertciauristiedooo4tilcsoingg1pntoitnooucrnronaonriimEvmlemldehiesaeduidpcgrmtncioarolhaeattecwnneivvowtdspeonelnotilrsttd-wisihacomimpsbnoircleliieydsptparistseetasthipdfilnhcmirnieuorgtfde,ircmlnovg-bengawpaoOoldasuoewMoreftw-syLapsndet4idnm,idneg ••• MtMdPUwotInhhflepacieMarltllognricthveesutrhreinraacogedarhdsfuehxd-neaitdpnpi,itncnuhegLaiacnePticrritletldtGh2igcyse-p0eaoadippnl2stmaSarifi3ononrfarpalnttcafp2ylsoeeeroe0tilatncslrflo2ieuogsgoOw2cinrnGn.ietbsiogFnuoaeeemigrfsrmuensltinicmPhtceGiolegstanianmamntAasasstnpNotPtewdlodOeldaiutel8Hnilolneb5tnGseuarse •••• CWAfaaPeatoooxnnnnrcouoepddddsqmrplohlaufUGbopprotuiretlbsoaorlereeietissncdmhtdiefaktterdiahdsnoaariarsdnmcirtentetheqrochavesudutferohcfigaistsnlnatdoicihunuttlslieqooaroaeeruiwcrlnneeifnicstisoeewteitetflsrsidaoerMseitsnniensPftrusotsN2wetfiin0uUnvEir1teoleO9whannnMdidelbldeeLablaodOd4llcoidcif0lkclaosktwed
MeaSseuerpinaggeou[XrXp]erformance • Reserves replacement ••• WOEaporenrkxininpggesribnbteoeforeersetinptreordeusct taionnd tax (EBIT) • Ganads rreevseenrvueess, production ••• W2PPoorrtrekfosineliogrveienxstpearaennsdstio2pCnrordeuscotuiorcnes •• CLoosrtpToirmateeIrnecsidpeonntsiFbrielitqyuienniticaytiv(LeTsIF) Additional Information [XXX]—[XXX]
Risk overview bBtgocadrEswdoaeonfxeeerohniipludamttotsligetihlnsnlsemloomremegtramrEgiaacocadea&oiitcptfnxerviauioAcavipraifmnntiiinilscanirttlgaraaikaioeliiasinlsitbyrtsmseacykgghslaetn,beiecoeislavsdytthaf.nipoetticaauodsidrcettnenehhhiksmavsccfeyeniiseaetenidynoisrntesrireetilettmoocsioaoocsfecgaifonhisnnsairaoecinteanecryfsubirsgca.pfrhsouiSoaornrteyrncelcwheycddmc-uepldrisudneosolaiiadsggsrecntitcislnudnaltsofrirhgrfueioivbistecleyenkoakrsnynss.t totbfoittnOpoCnoeahhufnperoicceaolpatmematiihthdlmllghiralnthneobaupiircerpdaiotweccdageisolsutreag-ne.iotnonoplbmyTaooptndfaeoshelheoet,r.refeaiiappnmtgTnsniymstrtkrCshysoeoassouceoaddlcwouprlapmneeCe.upseitAtradsccteoothprarshbtaermrdaiciaasoeetopnneuhytsnpvgtdesycdseieeabadeottaddreneilfttopven,eooahyxmoneadpiiteellahiorebsrssaoatnagdodro,inartndasrhivtylodnokutneonaiesnnndutsgwaeirafsoosnprpramcunkweadnohsruipdvsos,liarllcreeettttcevtbhriasdodrouee,teegnicrdolaeosetunul.wyrrees
Annual Report and Accounts 2021 aatDoslgaoetnfrerogcagodsuteprproroneepiertwdlqeoaxg,uttrctrtietvohhiuraneeweenptlsyisaandtsicnbaeaiciigtausntutysnnadfr.codiatTfeseirlachcgnptnaehatarcnoelsspeetdtatsoaooiucmegnffcecgeiirnenteaoovrogsstiernfowassigdnuntuhemriNdccnivcheveiemghesnlaeostatisrhpntgiwmaemSntihieleisleteptunnoldtataet. itspoiiccaCnnnrecoopraocciNeccmnnprrmeekeeissogpiaastspanreressstceaghruteititintiainniitgtodotgioiivhiotanstueingeehbnsniunsrert.i.lcfoeimtotOaesewnyrnenbrsiltutdctsioepaohpteriraonesnsioccarutitcr.feyrcncHeapiedncwvanirgseodemthsdhhslsuaesreetslotinoefvintrluieirvelteccylaeylveayaanlpsaarpceideanllqusoixtrgaoaaefuotinlatccirspicnsiugiprtagetiabaoensilnnnoeatcsnlsktoss dFciotthsaopeeirlpcliupvCuoreoerrorrrtaemutvotnaneptliautarpideeenohssyare,p’tcssrfoecoeanrlcbtiesoouiti,lbiirottaeihylncitectcyotaohecpeisgaiitfstsfnhaincelsseiasheewntanvdsertebltyrauehuonllotsyidpmilndiaemeearrdsartpesstsee.lydoef
24 Seplat Energy Plc Annual Report and Accounts 2021 Seplat Energy Plc 25
Since inception we have been guided by a clear and consistent UNDERPINNED BY: INTEGRITY, PARTNERSHIP, AMBITION, AGILITY Annual Report and Accounts 2021 Seplat Energy Plc 25
strategy that is supportive of our long-term ambition to be the 24 Seplat Energy Plc SAFETY
leading indigenous African independent energy company. Annual Report and Accounts 2021
Strategic pillars Increase our resources Increase production and Develop gas to drive Pursue profitable Behave responsibly, Governance Report 74 — 138
improve its profitability Nigeria’s energy new opportunities and share our success
transition
Description We must constantly replenish our reserves Our value chain involves developing fields We see rich opportunities for growth in Nigeria Being a responsible and accountable Financial Statements 139 — 260
Progress to assure future supplies. However, we must and then extracting, processing and Nigeria has vast resources of natural gas including future licensing rounds, asset corporate citizen is a key priority. We
also increase reserves if we are to maintain exporting the hydrocarbons they produce. and a pressing need to improve access to divestments from international oil companies, recognise that minimising the effects of our
growth. We aim to drill at least one We will maximise profitability and return on affordable energy and bring the country’s asset farm-ins and acquisition opportunities activities on the environment, understanding
exploration well per year, focusing on investment by maintaining strict cost control, energy consumption towards global norms, amongst independent E&P companies. Our local issues, positively contributing to our
prospects that offer rapid and low-cost implementing the most appropriate by replacing millions of inefficient diesel and focus is on securing blocks in the onshore host communities, being a first-rate employer
production, using existing infrastructure technologies and organising ourselves and petrol generators with utility-scale gas power and offshore areas of the Niger Delta that offer and providing our staff with a safe working
if possible. Our development drilling our service providers to deliver development stations. The growth of our gas business is near-term production growth, cash flow and environment and career development
programmes also enable us to assess projects on time and within budget. Once therefore a priority that will deliver multiple reserve replacement potential. In the longer opportunities are essential enablers that
the upside potential of fields, allowing us operational, we aim to safely extract the benefits such as protection from oil price term we may diversify our hydrocarbon allow us to achieve our goals. Supporting
to maximise hydrocarbon recovery from maximum volume of hydrocarbons for lowest volatility, greater earnings visibility, higher cash portfolio by pursuing assets outside Nigeria. all of this is a strict adherence to strong
reservoirs and capitalise on low-risk reserve possible cost. In the export phase, we must generation and cleaner production. Our 465 In addition, we will actively look for new corporate governance and business integrity
addition opportunities. Following the maximise uptime and reduce reconciliation MMscfd Oben Gas Processing Plant, one opportunities in renewable energy to ensure culture throughout our organisation. We
successful integration of Eland, we will look losses, if necessary developing our own of Nigeria’s largest, will soon be augmented we are a major player in this important and will share our success in the form of
to acquire new assets where appropriate. export routes, to mitigate asset concentration by OML 53’s new 300 MMscfd ANOH facility, potentially very profitable growth sector for remuneration, taxes, royalties, community
and reliance on third-party infrastructure. which will come onstream in 2023. Nigerian energy companies. investment and dividends for shareholders.
• Project activities associated with
preparation for drilling the high-impact, • Focused on highest-impact, value-adding • Increase utilisation of Oben Gas Plant • Acquired direct interests in seven blocks • Proven community engagement model
near-field Sibiri (formerly Amobe) work programme prioritising gas through third-party agreements and further revenue interest in one block aligns Seplat with host communities
exploration well in OML 40 were completed to date
• Production impacted by third-party • Upgrading the Sapele Gas Plant to 85 • High retention rate of skilled and motivated
• The well was drilled in early 2022 with initial infrastructure downtime MMscfd, LPG processing unit module • Completed the acquisition of Eland Oil workforce
indications it encountered eight oil-bearing will enhance plant economics and ensure and Gas that holds interests in OML 40
reserves with 353ft gross pay (229ft net) • Amukpe to Escravos pipeline now that routine gas flaring is eliminated and Ubima marginal field in 2019 • Paid $130 million in taxes and royalties
commissioned and will reduce downtime in 2021
and reconciliation losses from OMLs 4, • Mechanical completion of the ANOH Gas • Proposed acquisition of MPNU will add
38 and 41 Plant expected in 2022. First gas will be four blocks in shallow water with dedicated • Returned over $400 million in dividends
delivered in 2023 following completion export infrastructure to shareholders since IPO
• Low unit production cost per boe of third-party infrastructure
• Discretion over level and timing of spend • Well positioned to access future deal flow • Embarked on new ESG initiatives, adopting
onshore and offshore TCFD and emissions reporting in 2022 Additional Information 261 — 276
allows alignment with cash flow
• Achieved 28 million hours without LTI on
assets operated by Seplat Energy
Measuring our performance • Reserves replacement • Working interest production • Gas reserves, production • Portfolio expansion • Lost Time Incident Frequency (LTIF)
See page 30 • Earnings before interest and tax (EBIT) and revenues • 2P reserves and 2C resources • Corporate responsibility initiatives
Exploration activities are focused on • Opex per boe • Working interest production
Risk overview determining the presence of hydrocarbons
whilst appraisal activities are focused on Oil and gas production operations have a Despite the abundance of resources in the Competition for upstream oil and gas blocks Failure to adhere to the highest standards of
26 Seplat Energy Plc better defining and assessing the number of risks attached, above and below ground, the natural gas sector in Nigeria is in Nigeria is intense and there are an corporate responsibility can severely impede
commerciality of a hydrocarbon discovery. the ground. The Company has a skilled at a relatively nascent stage of development increasing number of industry participants the Company’s ability to efficiently operate
Both activities by definition carry significant technical team with a detailed knowledge and requires significant ongoing investment seeking to grow their presence in or gain its current portfolio, access new business
geological risk, so the technical maturity of the geology and reservoir dynamics to grow capacity. The pace at which the access to the sector. High levels of opportunities, secure capital and ultimately
of an E&A target is key to narrowing the to allow optimal production solutions to sector grows and scale of investment will to a competitive tension can drive acquisition deliver value accretion to its shareholders.
range of risk and uncertainty. Seplat seeks be implemented. Above the ground, the large extent dictate the timing and magnitude prices higher. Oil price volatility also presents
to use available technologies including Company has clear systems and procedures of opportunities for producers such as Seplat. increased uncertainty when evaluating
seismic analysis to minimise pre-drill risks in place to ensure the safe and secure opportunities and access to capital can also
and maximise chances of a successful operation of its operated oil and gas constrain ability to successfully execute
drilling outcome. production, processing and transportation transactions.
facilities. The Company does, however, rely
Annual Report and Accounts 2021 on third-party operated export infrastructure
that has been susceptible to interruptions.
Annual Report and Accounts 2021 Seplat Energy Plc 27
Annual Report and Accounts 2021 Seplat Energy Plc 25
Strategy
Delivering on
the strategy
Since inception we have been guided by a clear and consistent
strategy that is supportive of our long-term ambition to be the
leading indigenous African independent energy company.
Strategic pillars Increase our resources Increase production and
improve its profitability
Description We must constantly replenish our reserves Our value chain involves developing fields
Progress to assure future supplies. However, we must and then extracting, processing and
also increase reserves if we are to maintain exporting the hydrocarbons they produce.
growth. We aim to drill at least one We will maximise profitability and return on
exploration well per year, focusing on investment by maintaining strict cost control,
prospects that offer rapid and low-cost implementing the most appropriate
production, using existing infrastructure technologies and organising ourselves and
if possible. Our development drilling our service providers to deliver development
programmes also enable us to assess projects on time and within budget. Once
the upside potential of fields, allowing us operational, we aim to safely extract the
to maximise hydrocarbon recovery from maximum volume of hydrocarbons for lowest
reservoirs and capitalise on low-risk reserve possible cost. In the export phase, we must
addition opportunities. Following the maximise uptime and reduce reconciliation
successful integration of Eland, we will look losses, if necessary developing our own
to acquire new assets where appropriate. export routes, to mitigate asset concentration
and reliance on third-party infrastructure.
• Project activities associated with
preparation for drilling the high-impact, • Focused on highest-impact, value-adding
near-field Sibiri (formerly Amobe) work programme prioritising gas
exploration well in OML 40 were completed
• Production impacted by third-party
• The well was drilled in early 2022 with initial infrastructure downtime
indications it encountered eight oil-bearing
reserves with 353ft gross pay (229ft net) • Amukpe to Escravos pipeline now
commissioned and will reduce downtime
and reconciliation losses from OMLs 4,
38 and 41
• Low unit production cost per boe
• Discretion over level and timing of spend
allows alignment with cash flow
Measuring our performance • Reserves replacement • Working interest production
See page 30 • Earnings before interest and tax (EBIT)
Exploration activities are focused on • Opex per boe
Risk overview determining the presence of hydrocarbons
whilst appraisal activities are focused on Oil and gas production operations have a
26 Seplat Energy Plc better defining and assessing the number of risks attached, above and below
commerciality of a hydrocarbon discovery. the ground. The Company has a skilled
Both activities by definition carry significant technical team with a detailed knowledge
geological risk, so the technical maturity of the geology and reservoir dynamics
of an E&A target is key to narrowing the to allow optimal production solutions to
range of risk and uncertainty. Seplat seeks be implemented. Above the ground, the
to use available technologies including Company has clear systems and procedures
seismic analysis to minimise pre-drill risks in place to ensure the safe and secure
and maximise chances of a successful operation of its operated oil and gas
drilling outcome. production, processing and transportation
facilities. The Company does, however, rely
Annual Report and Accounts 2021 on third-party operated export infrastructure
that has been susceptible to interruptions.
CEO interview | continued A strategy in transition
Our new strategic framework These imperatives will be enabled by Strategic Report 01—73 On pages 24 we outlined the new corporate strategy
strong governance and risk management, that we launched at the Capital Markets Day in July,
In July we outlined a strategy through which the newly underpinned by our values. and so this 2021 Annual Report is based upon the
renamed Seplat Energy will lead Nigeria’s energy transition. existing five-pillar strategy described below, with
Replacing the existing five-pillar framework described on which we started the year under review.
pages 26 to 27, the new strategy will be developed and
implemented in 2022 based upon the imperatives to Build a As already mentioned, we are realigning all aspects
Sustainable Business and successfully Deliver Energy Transition. of our operations, including the way we measure and
report them, with the new strategic framework, which
STRONG GOVERNANCE AND RISK MANAGEMENT is based upon the imperatives to Build a Sustainable
Business and Deliver Energy Transition.
Our key priorities: Overall strategic results: Governance Report 74 — 138 Strategic Report 01—73
Read more
Build a DRIVE SOCIAL DEVELOPMENT FOCUS ON ENVIRONMENTAL FOR ALL STAKEHOLDERS Aligning KPIs and risks
Sustainable CARE & REPORTING Having defined the strategic framework to Pages 24
Business Make a positive impact on communities Manage our finances prudently, pay our take Seplat Energy forwards, our next step
through improved access to energy, Minimise our impact on local and global share of taxes and royalties, service debt, will be to develop key performance indicators
opportunities for local employment and environments, drive improvements where invest for the future, and return dividends and risk metrics that will align our day-to-day
suppliers, and initiatives that foster possible, commit to global standards and to shareholders. activities with the overall strategic goals. This
entrepreneurship, education, health transparently report our progress. will ensure that everyone in Seplat Energy is
and resilience. well aware of what is required of them, how
their performance will be measured, and how
Key initiatives: Key initiatives: Key initiatives: Increasing access to understand and quantify the risks to the
– Increase community employment – Achieve significant reductions – Remain the partner of choice for efficient to energy new strategic goals. For the purpose of this
2021 Annual Report, all KPIs and risk metrics
and content in emissions and responsible stewardship of Nigeria’s Reducing will relate to our previous five-pillar strategy,
– Foster local entrepreneurship – Establish comprehensive ESG baseline hydrocarbon assets emissions which is described on pages 30.
– Improve healthcare and education – Diversify the business against oil
– Improve access to energy in local to guide policies and targets for reduction price volatility Financial Statements 139 — 260
– Report Scope 1 & 2 emissions as – Maintain prudent cash and debt
communities management strategy
soon as possible – Drive growth through astute capital
– Report under TCFD framework in 2022 allocation
– Develop policies for biodiversity – Return cash to shareholders
and water NEW ENERGY
MAXIMISE RETURNS Achieve a world-class capability in
renewable energies, through the
Deliver UPSTREAM MIDSTREAM GAS development or acquisition of new skillsets
Transition that open up new and profitable markets.
Develop our Upstream business by Development of Nigeria’s gas resources
selectively expanding our asset base, to accelerate the replacement of diesel
optimising the gas/oil mix, increasing and biomass and support economic
production, reducing costs and carbon growth through the supply of reliable,
intensity, and increasing revenue low cost energy. Gas-to-power provides
assurance by diversifying routes to market. baseload electricity to support renewables.
Key initiatives: Key initiatives: Key initiatives: Transforming Our 2021 Additional Information 261 — 276
– Increase utilisation of existing gas plants – Selective entry to power the economy strategic framework
– Monetise reserves – Deliver ANOH successfully This 2021 Annual Report measures
– Diversify export routes – Develop new gas markets, e.g. business generation market
– Operational efficiency – Combine gas with solar performance and risks in the context of
– Cost control / Technology parks, universities – Explore carbon offset markets
– Decarbonise field operations – Develop LPG products and distribution – Ensure continued access to capital the previous five-pillar strategy outlined
– End routine flares
– Asset integrity & safety channels on page 26.
– Efficient project delivery – Develop Compressed Natural Gas
Strategy
products for vehicles
CEO interview | continued A strategy in transition
Our new strategic framework These imperatives will be enabled by Strategic Report [01]—[XX] On pages 24 we outlined the new corporate strategy
strong governance and risk management, that we launched at the Capital Markets Day in July,
In July we outlined a strategy through which the newly underpinned by our values. and so this 2021 Annual Report is based upon the
renamed Seplat Energy will lead Nigeria’s energy transition. existing five-pillar strategy described below, with
Replacing the existing five-pillar framework described on which we started the year under review.
pages [XX] to [XX], the new strategy will be developed and As already mentioned, we are realigning all aspects of
implemented in 2022 based upon the imperatives to Build a our operations, including the way we measure and
Sustainable Business and successfully Deliver Energy Transition. report them, with the new strategic framework, which
is based upon the imperatives to Build a Sustainable
STRONG GOVERNANCE AND RISK MANAGEMENT Business and Deliver Transition.
Our key priorities: Overall strategic results: Governance Report [XX]—[XXX] Read more Strategic Report 01—73
Pages 24
Delivering on Build a DRIVE SOCIAL DEVELOPMENT FCOACRUE S&ORNEPEONRVTIRINOGNMENTAL FOR ALL STAKEHOLDERS AHalivginngindgefiKnePdIsthaensdtraritsegkisc framework to
the strategy Sustainable wtaanikldlebrSeisektopmldaetetEvrenicleosrpgthykaeftoywrpwilelaarrfldoigsrnm, ooauunrrcndeeaixnyt-dstiocte-apdtoarys
Business Make a positive impact on communities Meninviimronisme eonutrsim, dpriavectimonprloocvaelmaenndtsglwobhaelre Manage our finances prudently, pay our waciltlievintiseusrwe itthhattheevoevryeoranlel sintraSteepgliactgEonaelsrg. Tyhisis
tohpropuogrthunimitipesrofvoerdloaccacl eesmsptoloyemneerngtya, nd ptroansssipbalere, cnotlmy rmepitotrot goluorbparlosgtarensdsa. rds and sinhvaerset ofofrtathxeesfuatnudrer,oaynadltireest,usrnerdviivciedednedbst, twheelilrapwearfroermofawnhcaetwisilrlebqeumireedasouf rtehde,man, hdohwow
esunptrpelpierresn, eaunrdshinipit,iaetdivuecsatthioant ,fohsetaeltrh to shareholders. tnoeuwnsdterarstetagnicdgaonadlsq. uFoarntthifye tphuerprisokssetooftthheis
and resilience. w20il2l r1eAlantenutoaloRuerpporretv, iaolul KsPfiIvsea-npdillarirssktmraetetgricy,s
which is described on pages [XX].
–K–eaIFnyoncsidrnteeciatroisalnoettciecvanoeltmse:nmtruenpirteyneemurpslhoiypment K–eAycihnieitviaetsivigensi:ficant reductions in emissions K–eRyeimniatiinattihveesp:artner of choice for efficient Incretoaseinngeragcycess Financial Statements [XXX]—[XXX]
–– IImmpprroovvee ahcecaelthsscatoreeannedrgeydinucloactiaoln – EtostgaubidlisehpcoolimciepsreahnednstaivregeEtSsGfobr aresdeulincetion haynddrorecsaprobnosnibalsessetteswardship of Nigeria’s sOturar t2e0g2ic1 framework
– RaseppoorstsSibcloepe 1 & 2 emissions as soon Reducing Tpheirsfo2r0m2a1nAcnenaunadl Rreispkosritnmtheeascuornetsext of
communities ––MRDAeepXveoIlrMotpuInpSdoEelicrRiTeECsTFfoDUr fbRraioNmdSievwerosritkyinan2d02w2ater – Dpriviceersvifoylatthileitybusiness against oil emissions othne ppargeevio[XuXs]f.ive-pillar strategy outlined
– Mmaainnatagienmpreundtesntrtacteagshy and debt
Deliver UPSTREAM MIDSTREAM GAS –– DaRlerloitvucerangtiorconawshthtothsrohuagrehhaosldtuetres capital
Transition
sDeelevecltoivpeloyuerxUppasntdreinagmobuur saisnseestsbbayse, DtoeavcecloeplemraetnettohfeNreigpelarica’esmgeanstreosf oduiercseels NEW ENERGY
poprotdimuicstiniognt, hreedguacsin/ogilcmoisxt,sinacnrdeacsainrbgon agnrodwbtihomtharosusgahndthseuspuppoprltyeocforneoliambilce, rAecnheiewvaebaleweonreldrg-cielas,stshcroaupgahbitlihtye in
ainstesunrsaitnyc, aenbdyindcivreerassifiynigngrervoeunteuse to market. lboawsecloosatdeenleecrgtryi.cGityasto-tsou-pppoworet rrepnroevwidaebsles. dtheavteoloppemn eunptnoerwacaqnudispitrioonfitoafbnleemwasrkkilelstes.ts
Key initiatives: Key initiatives: Key initiatives: Tthraenescfoornmominyg Additional Information [XXX]—[XXX]
–– IDneclrievearsAeNuOtiliHsastuiocncoefssefxuislltying gas plants – gSeenleecrtaivteionenmtrayrtkoetpower
–– MDiovenrestiifsyeerxepsoerrtverosutes ––– cDpDDhaeeearvvvkneeesnlllooo, euppplnsCnLivPeoeGwmrspgiptirareoessdsmsuecadtrskNeaatnstdu, erda.gils.Gtbraibususitnioenss ––– EECnxopsmulorbreeincceoagnrabtinsounweoidtfhfassceoctlaemrsasrtkoetcsapital
–– OCopsetractoionntraolle/ffTiceicehnncoylogy
–––– DEAEfnesfidscceairetornbiuntottpiennrgiesorejfietlayfciret&elddsseoalipfveeetrryyations products for vehicles
Since inception we have been guided by a clear and consistent UNDERPINNED BY: INTEGRITY, PARTNERSHIP, AMBITION, AGILITY Annual Report and Accounts 2021 PRaegaedsm[XoXre] 23
strategy that is supportive of our long-term ambition to be the 22 Seplat Energy Plc SAFETY Seplat Energy Plc
leading indigenous African independent energy company. Annual Report and Accounts 2021
Strategic pillars Increase our resources Increase production and Develop gas to drive Pursue profitable Behave responsibly, Governance Report 74 — 138
improve its profitability Nigeria’s energy new opportunities and share our success
transition
Description We must constantly replenish our reserves Our value chain involves developing fields We see rich opportunities for growth in Nigeria Being a responsible and accountable Financial Statements 139 — 260
Progress to assure future supplies. However, we must and then extracting, processing and Nigeria has vast resources of natural gas including future licensing rounds, asset corporate citizen is a key priority. We
also increase reserves if we are to maintain exporting the hydrocarbons they produce. and a pressing need to improve access to divestments from international oil companies, recognise that minimising the effects of our
growth. We aim to drill at least one We will maximise profitability and return on affordable energy and bring the country’s asset farm-ins and acquisition opportunities activities on the environment, understanding
exploration well per year, focusing on investment by maintaining strict cost control, energy consumption towards global norms, amongst independent E&P companies. Our local issues, positively contributing to our
prospects that offer rapid and low-cost implementing the most appropriate by replacing millions of inefficient diesel and focus is on securing blocks in the onshore host communities, being a first-rate employer
production, using existing infrastructure technologies and organising ourselves and petrol generators with utility-scale gas power and offshore areas of the Niger Delta that offer and providing our staff with a safe working
if possible. Our development drilling our service providers to deliver development stations. The growth of our gas business is near-term production growth, cash flow and environment and career development
programmes also enable us to assess projects on time and within budget. Once therefore a priority that will deliver multiple reserve replacement potential. In the longer opportunities are essential enablers that
the upside potential of fields, allowing us operational, we aim to safely extract the benefits such as protection from oil price term we may diversify our hydrocarbon allow us to achieve our goals. Supporting
to maximise hydrocarbon recovery from maximum volume of hydrocarbons for lowest volatility, greater earnings visibility, higher cash portfolio by pursuing assets outside Nigeria. all of this is a strict adherence to strong
reservoirs and capitalise on low-risk reserve possible cost. In the export phase, we must generation and cleaner production. Our 465 In addition, we will actively look for new corporate governance and business integrity
addition opportunities. Following the maximise uptime and reduce reconciliation MMscfd Oben Gas Processing Plant, one opportunities in renewable energy to ensure culture throughout our organisation. We
successful integration of Eland, we will look losses, if necessary developing our own of Nigeria’s largest, will soon be augmented we are a major player in this important and will share our success in the form of
to acquire new assets where appropriate. export routes, to mitigate asset concentration by OML 53’s new 300 MMscfd ANOH facility, potentially very profitable growth sector for remuneration, taxes, royalties, community
and reliance on third-party infrastructure. which will come onstream in 2023. Nigerian energy companies. investment and dividends for shareholders.
• Project activities associated with
preparation for drilling the high-impact, • Focused on highest-impact, value-adding • Increase utilisation of Oben Gas Plant • Acquired direct interests in seven blocks • Proven community engagement model
near-field Sibiri (formerly Amobe) work programme prioritising gas through third-party agreements and further revenue interest in one block aligns Seplat with host communities
exploration well in OML 40 were completed to date
• Production impacted by third-party • Upgrading the Sapele Gas Plant to 85 • High retention rate of skilled and motivated
• The well was drilled in early 2022 with initial infrastructure downtime MMscfd, LPG processing unit module • Completed the acquisition of Eland Oil workforce
indications it encountered eight oil-bearing will enhance plant economics and ensure and Gas that holds interests in OML 40
reserves with 353ft gross pay (229ft net) • Amukpe to Escravos pipeline now that routine gas flaring is eliminated and Ubima marginal field in 2019 • Paid $130 million in taxes and royalties
commissioned and will reduce downtime in 2021
and reconciliation losses from OMLs 4, • Mechanical completion of the ANOH Gas • Proposed acquisition of MPNU will add
38 and 41 Plant expected in 2022. First gas will be four blocks in shallow water with dedicated • Returned over $400 million in dividends
delivered in 2023 following completion export infrastructure to shareholders since IPO
• Low unit production cost per boe of third-party infrastructure
• Discretion over level and timing of spend • Well positioned to access future deal flow • Embarked on new ESG initiatives, adopting
onshore and offshore TCFD and emissions reporting in 2022 Additional Information 261 — 276
allows alignment with cash flow
• Achieved 28 million hours without LTI on
assets operated by Seplat Energy
Measuring our performance • Reserves replacement • Working interest production • Gas reserves, production • Portfolio expansion • Lost Time Incident Frequency (LTIF)
See page 30 • Earnings before interest and tax (EBIT) and revenues • 2P reserves and 2C resources • Corporate responsibility initiatives
Exploration activities are focused on • Opex per boe • Working interest production
Risk overview determining the presence of hydrocarbons
whilst appraisal activities are focused on Oil and gas production operations have a Despite the abundance of resources in the Competition for upstream oil and gas blocks Failure to adhere to the highest standards of
26 Seplat Energy Plc better defining and assessing the number of risks attached, above and below ground, the natural gas sector in Nigeria is in Nigeria is intense and there are an corporate responsibility can severely impede
commerciality of a hydrocarbon discovery. the ground. The Company has a skilled at a relatively nascent stage of development increasing number of industry participants the Company’s ability to efficiently operate
Both activities by definition carry significant technical team with a detailed knowledge and requires significant ongoing investment seeking to grow their presence in or gain its current portfolio, access new business
geological risk, so the technical maturity of the geology and reservoir dynamics to grow capacity. The pace at which the access to the sector. High levels of opportunities, secure capital and ultimately
of an E&A target is key to narrowing the to allow optimal production solutions to sector grows and scale of investment will to a competitive tension can drive acquisition deliver value accretion to its shareholders.
range of risk and uncertainty. Seplat seeks be implemented. Above the ground, the large extent dictate the timing and magnitude prices higher. Oil price volatility also presents
to use available technologies including Company has clear systems and procedures of opportunities for producers such as Seplat. increased uncertainty when evaluating
seismic analysis to minimise pre-drill risks in place to ensure the safe and secure opportunities and access to capital can also
and maximise chances of a successful operation of its operated oil and gas constrain ability to successfully execute
drilling outcome. production, processing and transportation transactions.
facilities. The Company does, however, rely
Annual Report and Accounts 2021 on third-party operated export infrastructure
that has been susceptible to interruptions.
Annual Report and Accounts 2021 Seplat Energy Plc 27
UNDERPINNED BY: INTEGRITY, PARTNERSHIP, AMBITION, AGILITY Annual Report and Accounts 2021 Seplat Energy Plc 25
24 Seplat Energy Plc SAFETY
Annual Report and Accounts 2021
Develop gas to drive Pursue profitable Behave responsibly, Governance Report 74 — 138
Nigeria’s energy new opportunities and share our success
transition Financial Statements 139 — 260
We see rich opportunities for growth in Nigeria Being a responsible and accountable
Nigeria has vast resources of natural gas including future licensing rounds, asset corporate citizen is a key priority. We
and a pressing need to improve access to divestments from international oil companies, recognise that minimising the effects of our
affordable energy and bring the country’s asset farm-ins and acquisition opportunities activities on the environment, understanding
energy consumption towards global norms, amongst independent E&P companies. Our local issues, positively contributing to our
by replacing millions of inefficient diesel and focus is on securing blocks in the onshore host communities, being a first-rate employer
petrol generators with utility-scale gas power and offshore areas of the Niger Delta that offer and providing our staff with a safe working
stations. The growth of our gas business is near-term production growth, cash flow and environment and career development
therefore a priority that will deliver multiple reserve replacement potential. In the longer opportunities are essential enablers that
benefits such as protection from oil price term we may diversify our hydrocarbon allow us to achieve our goals. Supporting
volatility, greater earnings visibility, higher cash portfolio by pursuing assets outside Nigeria. all of this is a strict adherence to strong
generation and cleaner production. Our 465 In addition, we will actively look for new corporate governance and business integrity
MMscfd Oben Gas Processing Plant, one opportunities in renewable energy to ensure culture throughout our organisation. We
of Nigeria’s largest, will soon be augmented we are a major player in this important and will share our success in the form of
by OML 53’s new 300 MMscfd ANOH facility, potentially very profitable growth sector for remuneration, taxes, royalties, community
which will come onstream in 2023. Nigerian energy companies. investment and dividends for shareholders.
• Increase utilisation of Oben Gas Plant • Acquired direct interests in seven blocks • Proven community engagement model
through third-party agreements and further revenue interest in one block aligns Seplat with host communities
to date
• Upgrading the Sapele Gas Plant to 85 • High retention rate of skilled and motivated
MMscfd, LPG processing unit module • Completed the acquisition of Eland Oil workforce
will enhance plant economics and ensure and Gas that holds interests in OML 40
that routine gas flaring is eliminated and Ubima marginal field in 2019 • Paid $130 million in taxes and royalties
in 2021
• Mechanical completion of the ANOH Gas • Proposed acquisition of MPNU will add
Plant expected in 2022. First gas will be four blocks in shallow water with dedicated • Returned over $400 million in dividends
delivered in 2023 following completion export infrastructure to shareholders since IPO
of third-party infrastructure
• Well positioned to access future deal flow • Embarked on new ESG initiatives, adopting
onshore and offshore TCFD and emissions reporting in 2022 Additional Information 261 — 276
• Achieved 24 million hours without LTI on
assets operated by Seplat Energy
• G as reserves, production • Portfolio expansion • Lost Time Incident Frequency (LTIF)
and revenues • 2P reserves and 2C resources • Corporate responsibility initiatives
• Working interest production
Despite the abundance of resources in the Competition for upstream oil and gas blocks Failure to adhere to the highest standards of
ground, the natural gas sector in Nigeria is in Nigeria is intense and there are an corporate responsibility can severely impede
at a relatively nascent stage of development increasing number of industry participants the Company’s ability to efficiently operate
and requires significant ongoing investment seeking to grow their presence in or gain its current portfolio, access new business
to grow capacity. The pace at which the access to the sector. High levels of opportunities, secure capital and ultimately
sector grows and scale of investment will to a competitive tension can drive acquisition deliver value accretion to its shareholders.
large extent dictate the timing and magnitude prices higher. Oil price volatility also presents
of opportunities for producers such as Seplat. increased uncertainty when evaluating
opportunities and access to capital can also
constrain ability to successfully execute
transactions.
Annual Report and Accounts 2021 Seplat Energy Plc 27
Value Creation Model
Generating value for
all of our stakeholders
Our business model leverages our core strengths, relationships
and experience to create long-term value and shared prosperity
for all of our stakeholders.
Inputs – resources Our expertise
and relationships
Unified and motivated Acquire Acquire
workforce The proposed acquisition of Explore & appraise
MPNU, announced in February
500+ 2022, will be transformational
for Seplat Energy, more than
multi-discipline employees doubling our reserves and nearly
trebling our production.
Operational expertise
Explore & appraise
84% The Sibiri exploration well in
OML 40 was drilled in early 2022
of production is under Seplat’s control with early indications that it had
encountered eight oil-bearing
Strong financial management reservoirs.
and access to capital
Develop
$715m We completed eight
new wells in 2021, recognising
Cash at bank, undrawn facilities our need for continuous
development of our assets
Effective HSSE and to ensure future streams
risk management of oil and gas that will drive
profitable cash flow.
0.00
Produce, process & sell
LTIF We aim to maximise production
of oil and reduce pipeline losses
Good corporate governance wherever possible, if necessary
by developing our own
91% infrastructure. Our ANOH gas
development will increase our
Corporate Governance Rating System share of the Nigerian gas market.
(2021 recertification)
New energy Through collaboration with
Social investment the Rural Electrification Agency,
Seplat Energy will be at the we intend to identify untapped
$11m centre of Nigeria’s energy markets of unserved and
transition. We will focus on underserved customer
for community development projects in 2021 increasing energy access by segments, targeting commercial
extending our business portfolio and industrial customers.
28 Seplat Energy Plc to the renewable energy sector
(Solar) in addition to gas-to-
power, using gas as a
transition fuel.
Annual Report and Accounts 2021
Strategic Report 01—73
Our competitive Outputs in 2021: What we delivered Governance Report 74 — 138
advantages
For our shareholders $73m
Industry expertise – Capital growth
We are Nigeria’s leading – Dividends
independent oil and gas
producer with a long track record Dividends paid to
of successful operations in shareholders in 2021
the industry. We build on this
expertise every day. For government
Strong relationships – Royalty and tax revenue
We are a trusted partner to the – F oreign and local capital investments
Nigerian Government and other
operators in the region. Our ANOH Payments and production $565m Financial Statements 139 — 260
project is classed as strategically entitlement to government
important for Nigeria, for whom reported in 2021
we are a leading supplier of gas
Develop for domestic power. For Nigeria
elop
Low-cost production – Infrastructure development
Produce, process & sell Our focus is on maximising – Multiplier effect from improved
Produce, process & sell output for the lowest cost
and this enables us to remain gas-to-power supply
profitable even at low oil prices.
1/3of Nigeria’s current power
Strong cash generation
Our prudent approach to generation can be underpinned
investment and low cost base by our gas production
enable strong cash generation
to repay debt, invest for the future For our host communities
and pay dividends. This gives
us the strength to tap capital – Economic empowerment
markets when needed, as – Healthcare and education
evidenced by our $650m
refinancing in 2021. Youths empowered following 109 Additional Information 261 — 276
completion of skills acquisition
programme in 2021
For our employees
– Training and development
– Shares awarded
Hours of employee 10,434
training in 2021
Reduced GHG emissions
– Scope 1 & 2 emissions reduction targets
Reduction in -21%
GHG emissions
Annual Report and Accounts 2021 Seplat Energy Plc 29
Key performance indicators
Measuring
our progress
Key performance indicator 2021 18,602 29,091 47,693 Definition & relevance
Net working interest production (boepd) 2020 17,469 33,714 51,183
2019 22,563 The Company’s share of oil and gas
47,693 2018 24,198 23,935 46,498 produced during the year proportionate
25,669 49,867 to its working interest in each producing
Gas Oil block. Volumes expressed are as measured
457 at the Company’s facilities, prior to any
2P reserves movement 2021 238 219 499 reconciliation losses.
2020 258 241 509 Relevance
-8.4% 2019 257 252 An indicator of production strength at the
2018 254 227 481 Company’s current blocks and the impact
of development activities at organic and
Gas Oil inorganic projects.
The number of barrels of oil equivalent added
to the 2P reserves base during the year,
expressed as a percentage increase/
decrease.
Relevance
An indicator of the Company’s ability to
capitalise on organic opportunities within
its portfolio and inorganic opportunities
to replenish its reserves base.
Production opex 2021 9.90 The operating costs (excluding non-cashflow
2020 8.90 expenses, and financing costs) net to the
$9.9/boe 2019 Company divided by the Company’s working
2018 6.20 interest barrels of oil and equivalent produced
EBIT 5.77 in the period.
Gas Oil
$251m Relevance
2021 -32 251 An indicator of how cost efficiently the
2020 Company is able to utilise its oil and gas
2019 312 reserves. By controlling its operating cost
2018 310 base the Company is able to be more
resilient in a period of depressed oil prices.
The Company’s earnings before the
deduction of interest and tax expenses.
Relevance
An indicator of the Company’s earnings
ability. An increase in EBIT requires growth
in revenue and/or strong cost control.
Lost Time Injury Frequency 2021 0 The number of lost-time incidents recorded
2020 0 per million man-hours worked.
0 2019 0
2018 Relevance
An indicator of health and safety
performance that is widely established
within the oil and gas industry.
0.14
30 Seplat Energy Plc Annual Report and Accounts 2021
Seplat Energy’s Key Performance Indicators are Strategic pillars Strategic Report 01—73
the measures that align strategy and execution 1 — Increase our resources
with consideration to risk management and 2 — Increase production and
remuneration. KPIs enable us to convey both
internally and externally our success in improve its profitability
achieving business objectives. 3 — Develop gas to drive
Nigeria’s energy transition
4 — Pursue profitable
new opportunities
5 — B ehave responsibly,
and share our success
Our strategy
Page 26
Progress & outlook Risk management
The Group delivered a consolidated average oil and gas production of The Company has an in-depth Progress Governance Report 74 — 138
47.7 kboepd. The average annual production rate was impacted by the understanding of the subsurface and Below expectations
number of days third-party export infrastructure is shut-in. 2021 production constantly monitors individual well
performance reflects an uptime level of 75% on the TFS over the full year. and reservoir performance in order Links to strategic pillars
Average reconciliation losses arising from use of third-party infrastructure to optimise the drawdown rate on 1/2/3/4
was around 14.5%. each well and maximise long-term
economic recovery of oil and gas Linked to remuneration?
Outlook from the reservoirs. It has also Yes (See page 125)
Production guidance on a average working interest production is set at prioritised the establishment of
50 – 60 kboepd in 2022. We expect production uptime to improve as the alternative oil export routes to
AEP export route becomes operational. mitigate high concentration risk.
Working interest 2P reserves at the end 2021 stood at 457.1 MMboe, an The Company high-grades its Progress
8.4% decrease on 2020. The change represents an organic decrease in inventory of exploration and Below expectations
overall 2P reserves due to production (10.6 MMbbls oil and 39.4 Bscf gas), appraisal opportunities, each being
and reclassification and revisions of previous estimates. subject to rigorous technical and Links to strategic pillars
commercial evaluation to de-risk as 1/3/4
Outlook far as possible prior to committing
A working interest 2C resource base of 74.9 MMboe, comprising capital. When evaluating new Linked to remuneration?
40.9 MMbbls oil and condensate and 197.1 Bscf gas, offers good long-term acquisitions the Company is careful Yes (See page 125)
reserves base with significant growth potential. We drilled the Sibiri to maintain price discipline and
exploration well in OML 40 early 2022 and encountered eight oil bearing undertake rigorous analysis.
reservoirs with net pay of 229 ft.
Operational expenditure per unit of production increased by 11% year on The Company carefully monitors Progress Financial Statements 139 — 260
year to $9.90 per boe as a result of lower production in 2021 impacted by expenditures and continually Above expectation
prolonged periods of shut-in at the Forcados oil terminal. Higher operations analyses its underlying cost base,
and maintenance costs, and unaccrued late charges related to OML 40 making comparisons to prevailing Links to strategic pillars
in the period also affected production costs per boe. market rates in order to ensure that 2/3/4
the Company is identifying and able
Outlook to action cost savings and efficiency Linked to remuneration?
The Company remains focused on cost control. Whilst increases in certain gains, keeping it competitively No
cost components are expected to increase year on year there are areas positioned on the cost curve.
where downwards pressure can be applied with the objective of achieving
a stable unit cost.
EBIT increased to $250.7m in 2021 and reflects the rise in oil price The Company has robust financial Progress Additional Information 261 — 276
realisations year on year. G&A costs were 5% higher year on year at $80m processes in place and carefully In line with expectations
because of increased administrative activities across the business monitors revenues, cost of sales and
compared to the previous year. admin costs to ensure continued Links to strategic pillars
strong profitability. Oil price is a major 2/3/4
Outlook influencing factor on the Company’s
Improved oil production levels, tight cost control and anticipated growth revenue. The Company is analysing Linked to remuneration?
in gas production at OMLs 4, 38 and 41 will ensure robust earnings potential hedging strategies to help mitigate Yes (See page 125)
in the future. Development of hydrocarbon resources in OML 40 and OML exposure to oil price volatility.
53 will also enhance our future earnings profile.
Lost Time Injury Frequency (LTIF) dropped steadily from 0.33 in 2016 to zero The Company has in place extensive Progress
in 2019 and this zero LTIF record was sustained in 2020 and 2021. At the end and well-developed HSE policies In line with expectations
of 2021, Seplat’s operated assets achieved 24 million man hours with zero and reporting procedures with an
fatalities and zero LTI with the last LTI incident in 2018. emphasis on the early identification Links to strategic pillars
and mitigation of HSE risks. The 1/2/3/4/5
Outlook Company closely monitors its HSE
In 2022, efforts will continue to minimise the frequency of lost time incidents performance and is constantly Linked to remuneration?
in all areas of operations to achieve the zero target for incidence. The evaluating ways to improve its Yes (See page 125)
Company will continue to ensure high HSE standards are met and assess performance.
opportunities to constantly improve its HSE systems and protocols.
Annual Report and Accounts 2021 Seplat Energy Plc 31
Additional performance metrics
Tracking our
performance
Key performance indicator 2021 394 Definition & relevance
Cash flow from operations 2020 309
2019 The Company’s operating cash flow
$394m 2018 338 in the year before taking into account
movements in working capital.
502 Relevance
An indicator of the cash generative
potential of the Company’s producing
oil and gas blocks.
Capital expenditures 2021 136 The total amount of capital expenditure
2020 150 invested during the year, excluding
$136m 2019 acquisition costs.
2018 125
88 Relevance
An indicator of the Company’s level
of investment activities in production,
development and exploration and
appraisal activities.
Realised oil price 2021 39.9 70.5 The average oil price per barrel sold
2020 by the Company during the period.
$70.5/bbl 2019 64.4
2018 70.1 Relevance
The Company’s financial performance
is closely linked to the oil price.
Staff turnover 2021 2.4 4.5 The rate at which full time staff of Seplat
2020 2.2 3.6 choose to leave the Company voluntarily,
2.4% 2019 expressed as a percentage of average
2018 full time headcount during the year.
Relevance
An indicator of the Company’s ability to
attract and retain personnel. The loss of
people can result in skills shortage, loss of
knowledge and higher recruitment costs.
32 Seplat Energy Plc Annual Report and Accounts 2021
In addition to its key performance indicators, Strategic pillars Strategic Report 01—73
Seplat Energy also tracks performance against 1 — Increase our resources
additional metrics that further assist in 2 — Increase production and
measuring progress.
improve its profitability
3 — Develop gas to drive
Nigeria’s energy transition
4 — Pursue profitable
new opportunities
5 — B ehave responsibly,
and share our success
Our strategy
Page 26
Progress & outlook Risk management
The Company’s operating cash flow of $394.3m was driven by higher Careful financial management and Progress Governance Report 74 — 138
oil prices during the year. The contribution of the gas business increased high levels of operating efficiency In line with expectations
during the period with improved receivables collection. allow the Company to ensure positive
cash generation from its operating Links to strategic pillars
Outlook activities. 1/2/3/4
Strong underlying wellhead oil production capacity and anticipated future
growth in gas production will ensure continued robust cash flow generation. Linked to remuneration?
Development of the recently acquired OML 40 block together with OML 53 Yes (See page 121)
and OPL 283 will also significantly augment future cash flow potential.
Capital expenditures in the period were $136.4 million, comprising $64 Project investments are monitored Progress
million drilling costs in relation to the completion of four gas wells, five oil closely against budgets to minimise Below expectations
wells and associated facilities development, and engineering costs of $72.4 the risk of over-runs. The Company
million. Capex was lower than the revised capex guidance of $167m due to benchmarks every investment Links to strategic pillars
well cost savings, engineering projects and planned wells slippage to 2022. opportunity to ensure capital is 1/3/4
deployed to only the highest return
Outlook projects, and adheres to a price Linked to remuneration?
Capex for 2022 is expected to be $160m. A minimum of ten wells are disciplined acquisition strategy. Yes (See page 121)
expected to be drilled and we will continue to invest in our gas development
projects and complete ongoing capital projects. The Company will continue Financial Statements 139 — 260
develop its portfolio, allocating capital to the opportunities that offer the
best returns and volume growth potential whilst scaling and timing
investments at appropriate levels to closely match cash flow generation.
Oil prices increased in 2021 as economic recoveries resulted in global The management team continues to Progress
demand rising faster than supply. The Brent spot price began the year at closely monitor prevailing oil market Above expectations
around $51/bbl reaching a high of $86/bbl in late October before declining dynamics and will consider further
in the final weeks of the year to close at $78/bbl. The average realised oil measures and take advantage of Links to strategic pillars
price achieved by the Group in 2021 was $70.5/bbl. opportune periods to implement 2/3/4
additional hedges to provide
The Company put in place dated Brent put options covering a volume of appropriate levels of cash flow Linked to remuneration?
8.0 MMbbls in 2021 at a strike price of $35-50/bbl. This hedging programme assurance. No
has been continued in 2022 where up-front premium put options at a strike
price of $50-60/bbl were entered into, protecting a volume of 6 MMbbls Additional Information 261 — 276
in aggregate for the first three quarters of 2022.
Outlook
The Company has historically sold most of its oil under the Forcados blend,
which has generally received a premium to the Brent market price. Once the
Amukpe to Escravos pipeline is available, we expect to sell c. 18,000 bbl/d
via the Escravos Oil Terminal at a price that will receive a premium to Brent.
Oil prices are expected to remain subject to global economic activity.
The Company has continued to develop its employment policies with the The Company’s policy is to provide Progress
aim of attracting and retaining high-calibre industry talent. Staff turnover industry competitive benefits In line with expectations
remained low in 2021 at 2.4%. packages and provide progressive
career opportunities to retain and Links to strategic pillars
Outlook attract high performing employees. 2/3/4
The industry is still expected, over the longer term, to continue to face skills
shortages in key areas with competition for high performing individuals Linked to remuneration?
amongst competitors being intense. Yes (See page 121)
Annual Report and Accounts 2021 Seplat Energy Plc 33
Risk management
Protecting
our business
Strong and effective risk management is central to how we
run our business and enables the delivery of our strategy.
Basil Omiyi Managing risk in protecting Our risk management system
Chairman, Risk Management our business
and HSSE Committee The Company’s risk management system
Risk management is an integral part of all is based on guidelines provided in ISO 31000,
the business activities of Seplat Energy. the international standards for risk
The Company’s risk management policy is management. The system is built on a
focused on the early identification of risks top-down and bottom-up approach with
and future risks that are central to achieving the Board of Directors (Board) determining
its strategy, corporate objectives and annual the appropriate risk appetite necessary to
business plans; their possible impacts on achieve the Company’s corporate objectives,
the business; and measures that can be while the business units identify and mitigate
implemented to mitigate the identified risks risks at the unit and asset levels.
so that Seplat Energy can continue to
operate safely and effectively. Seplat The Risk Management and HSSE
Energy recognises that risk management is Committee assists the Board in overseeing
a continuous journey of improvement, not a the Company’s risk management framework
destination, and will continue to develop its and the risk/reward strategy as determined
risk management processes to ensure the by the Board. The Committee ensures
Company is fully equipped to deal with the that the Company has adequate risk
constantly evolving operating and business management systems in place to manage
environment of the energy sector. the diverse and changing risks and
Our risk management framework
ISO 31000 based, top-down and bottom-up approach
Board of Directors
Company strategy | Risk appetite | Strategic risks oversight
Risk Management and HSSE Committee of the Board
• Approves and updates risk management policy and system
• Defines risk appetite
• Oversees and monitors enterprise risks
Executive Management Risk Management Team Internal Audit
Delivery of Company strategy | Identify key risks Coordinates enterprise risk management • Independent assurance
against the achievement of strategy | Proffer activities | Articulates and updates risk • Reports to Audit and
and deploy actions and controls to address management policy and system | Risk
key risks | Monitor enterprise risks identification, assessment, quantification Finance committees
and rating | Risk reporting and monitoring | of the Board
Enterprise risk register and dashboard |
Risk Champion activities
Business Units
Business objectives | Risk identification, assessment and rating | Mitigation actions and controls |
Monitor risks and mitigation actions | Report risks and mitigation actions status
Risk identification, monitoring, mitigation action implementation and monitoring are bottom-up from assets,
projects and function levels
34 Seplat Energy Plc Annual Report and Accounts 2021
opportunities faced by the Company as it During the year, Seplat Energy took Notable events during the year as part Strategic Report 01—73
creates value for shareholders. It meets at the opportunity to review its strategy of the strategy evolution and Company’s
least three times in a year to analyse and and align it with the imperatives of re-branding and name change include the Governance Report 74 — 138
evaluate the Company’s key risk profiles, the energy transition agenda.” Capital Markets Day held in London, in July
proposed mitigation strategies, mitigation 2021, as well as the Seplat Energy Summit Financial Statements 139 — 260
actions taken by management and any Activities in 2021 2021 in October 2021, with a record global
residual risk exposures. The meetings hybrid of online participation and onsite Additional Information 261 — 276
are attended by Executive Directors who During the year, our risk landscape remained presence in Abuja.
have accountability for ensuring that risk largely stable with respect to existing
identification is comprehensive and exposures, since our last update in 2020. The In terms of delivery of its promise to the
proposing mitigating measures that are Company did well to manage the lingering market, the Company demonstrated once
effective in achieving the desired objectives. impact of the Covid-19 pandemic via a again its ability to weather tough times by
Reports on the Company’s corporate risk strategic management vehicle called delivering a substantial part of its 2021 work
register, key risk exposures in the business COVIMOG (the Corona Virus Monitoring programme. The Company successfully
operations and reviews of its risk Group). As such, the Company’s leadership drilled five oil wells and three gas wells across
management systems are compiled and through the COVIMOG continued to sustain its portfolio, and despite a 25% operational
presented to the Board of Directors. the Company’s business and observed all downtime in the period deliver a consolidated
recommended preventive measures advised average oil and gas production of 47, 693
While key risks and associated risk appetites by both the Presidential Task Force (PTF) and boepd. This would not have been possible
are determined at the top, the business units State Governments. Covid testing remained without the successful implementation of the
and functional managers are accountable mandatory for everyone carrying out activities Covid-19 protocols under the watch of the
for the respective risks within their areas. in the various areas of the Company’s COVIMOG across the Company’s operations.
operations and travel advisory updates were
The Company’s enterprise risk management regularly shared with staff. Provision remained In the course of 2021, the Company achieved
(ERM) system, coordinated by the Head, in place for targeted tests of personnel in all zero fatalities and zero Lost Time Injury (LTI),
Enterprise Risk Management and overseen locations as required. Follow-up treatment of with more than 24 million man-hours since
by the Board Risk Management and HSSE positive cases continued to be managed and the last recorded LTI incident in 2018, which
Committee, supports risk management funded by the Company. is a commendable achievement.
across the business and functions. The
Company’s ERM system includes robust risk Also, as facilitated by the Lagos State Overall, in 2021, the Committee analysed and
identification, assessment, reporting and Government, Covid-19 booster vaccines are evaluated the various key risk exposures for
monitoring mechanisms and approaches that now readily available in government health the Company. In doing so, the Corporate Risk
include maintenance of both enterprise and centres, and the Company plans to keep on Register was reviewed, and the risk reports
functional/operational levels risk registers, risk liaising with appropriate bodies in the industry presented by Management. These reports
dashboard, mitigation actions monitoring/ to facilitate this booster process. detail the key risks, the potential impact
tracking and risk reporting. of the risks and the likelihood of occurrence.
During the year, Seplat took the opportunity Mitigating strategies were comprehensively
In a bid to continually embed risk to review its strategy to align it more with the considered, including but not limited to those
management across the business and imperatives of the energy transition agenda. related to the stability in the Niger Delta, oil
functions, the Company utilises specially Accordingly, the Company changed its name price volatility, export line breaches and
appointed and trained Risk Champions to to Seplat Energy Plc to reflect its focus on alternative crude oil evacuation options.
ensure common methodology, language being an indigenous independent energy Other risks considered are management
and approach in the way risks are managed company leading the energy transition of government and JV relations, liquidity,
across the business. agenda in Nigeria and Africa. The change to geo-political, environmental, market,
Seplat Energy also reflects the exciting future contractual and litigation risks. The status
The Internal Audit unit undertakes periodic ahead of the Company as a supplier of a and effectiveness of mitigation actions were
audits of the various business units including more diverse range of energy products, reviewed, and any residual gaps or follow-up
the Company’s corporate governance not just oil and gas. The greatest business actions were identified. Key performance
systems and risk management processes. opportunity for the Company is to supply indicators as well as other risk indicators and
the right mix of energy to support Nigeria’s trends were monitored. Key risks requiring
Key principles that underpin the Company’s growth. In doing so, the Company’s energy risk tolerance considerations and strategic
risk management framework and system: strategic focus is to develop gas resources to actions were presented to and debated
replace small-scale generation, reduce global by the Board.
• Strong focus on safety throughout the CO2 emissions, enter the renewable energy
organisation. market, make a positive social impact in The Committee reviewed the risk
Nigeria and contribute to its achievement management systems including the risk
• Close oversight by senior management of the United Nations’ Sustainable dashboard and assessment tables. The
in day-to-day business operations. Development Goals. Committee gave further consideration to
the achievements made by the Risk
• ‘Risk owners’ throughout the business. Champions appointed with a view to unify
• Accountability of staff and/or key personnel. risk management approaches and embed
• Regular and timely reporting. risk culture across the organisation.
• Clear line of sight on the system of internal
controls.
• Monitoring and independent reviews.
Annual Report and Accounts 2021 Seplat Energy Plc 35
Risk management | continued
High-profile risks
and uncertainties
Highlighted below are the high-profile risks that the Company
dealt with in 2021 and will continue to monitor going into 2022.
12
Infectious diseases outbreak With regards to field operations, throughout Niger Delta stability/extended
(Covid-19) the year, normal crew change happens only production shut-in due to third-
after the incoming crew have taken a PCR party infrastructure downtime,
At the start of March 2021, the Federal test with the resultant negative result after 48 and geo-political risk
Government of Nigeria, through the Nigerian hours when it is expected that the test result
Primary Health Care Development Agency, should have been issued. This requirement Seplat Energy’s core operations are located
took delivery of the initial order of about four is complemented by compliance with other in the Niger Delta region of Nigeria and that
million Covid-19 vaccine doses, following established non-pharmaceutical measures comes with significant risks. Historically,
which a portal for all Nigerians to pre-register of regular hand washing, hand sanitising, the Niger Delta has always been a high-risk
to receive the vaccination was opened. frequent cleaning of commonly touched environment. Cases of militancy, crude oil
The deployment of vaccines triggered the surfaces, mandatory wearing of face masks theft, pipeline vandalism, environmental
beginning of hope being offered to ending and social distancing. Application of pollution arising from illegal bunkering
the pandemic but with challenges in the non-pharmaceutical preventive measures activities, and other lawless activities are
supply chain, it has taken a while for it to is mandatory in all the Company’s office rife in the region. During 2021, the business
keep everyone safe from the virus. environments. Additional measures put in recorded zero occurrence in militancy
place include: activities, similar to the previous year.
In view of the foregoing, Seplat Energy
Leadership via the COVIMOG framework, put • Visitors were not allowed in Seplat Energy The Company, working with other industry
in place a controlled return of office-based offices except for critical business needs players in the region, continues to put pressure
personnel to offices in Lagos, Sapele and and only after clearance issued by the on government to find a lasting solution to
Owerri at the onset of Q2, 2021 which lasted Human Resources team. Niger Delta restiveness and the current
all throughout the year. PCR tests were made security measures put in place by the facility
mandatory for everyone carrying out activities • Meetings and events continued to be held operator, together with government’s strategy
in the various areas of the Company’s via electronic media. All indoor meetings of dialogue with stakeholders in the region,
operation and travel advisory updates shared were delivered by exception only and seems to be working.
with staff. The deployment of vaccines was required approval from the Human
also successful as a reasonable number of Resources team. Attendance at such With respect to extended production shut-in
staff were fully vaccinated by end of Q3, 2021. meetings was limited to not more than due to third-party interference, the third-party
In view of the foregoing, during Q3 and Q4 twenty persons including supporting operated Trans Forcados export system
2021, the Company continued to maintain personnel and all non-pharmaceutical remains Seplat’s primary crude evacuation for
occupancy of the spaces/offices at 50%. preventive measures were put in place its main assets (OMLs 4, 38 and 41) and this
to be observed throughout the event. poses a significant risk to Seplat. The system
was out of operation for more than a year
between 2016 and 2017 due to sustained
breaches by militants leading to extended
shut-in of production. Even though there
was no major breach of the line in 2021,
the risk remains significant.
In fact, operational issues at the Forcados
Terminal in August led to a significant fall in
exports in August and September, as well
as in December, resulting in lower-than-
expected exports of our oil. The Company is
mitigating the risk by seeking a second major
export line, the Amukpe to Escravos Pipeline
(AEP), which we expect to be operational in
Q2 2022. Accordingly, the focus for the
Company remains to have at its disposal,
two major export systems in the West, with
additional options also identified in the East,
to evacuate crude from its main assets.
36 Seplat Energy Plc Annual Report and Accounts 2021
Strategic Report 01—73
35 Governance Report 74 — 138
Low oil price environment Our risk landscape remained Climate change Financial Statements 139 — 260
largely stable with respect to
Seplat Energy’s operating results are highly existing exposures since our Seplat Energy’s contribution to domestic gas/
dependent on the prices of crude oil, natural last update in 2020.” energy supply comes with some implications
gas, and other products derived from the for climate change, as production activities
energy mix. The Company’s estimated are accompanied by some routine gas flaring,
proved reserve, revenue, operating cash flows which the Company has made concerted
and margins, liquidity and future earnings efforts to manage within the requirements
are all impacted by the volatility of crude oil, of regulation.
natural gas prices, as well as established
prices emanating from the other products The risk considers the direct impact on
derived from the strategic energy mix. the ecosystem as a result of heightened
gas flaring activities, resulting in considerable
Seplat Energy’s price risk management policy weather (temperature) changes, major
is to protect the Company’s crude oil cash ecosystem collapse/damage with serious
flow from downside scenarios with hedging. economic and social consequences, as
During the year, the volume of protection well as biodiversity loss.
stood at ca. 67-80% and rose alongside
the acquisition of Eland. This translates into A number of mitigation actions have been
purchasing between 2-2.5 MMbbls/quarter put in place to manage this risk. These include
of put protection. Overall, the Company focus on the delivery on projects earmarked
protected about 8 million barrels of crude to reduce and/or eliminate routine gas flaring
oil at an average strike of $40/bbl in 2021. as spelt out under the Company’s ‘Gas Flares
Our long-term natural gas contracts have Out Roadmap’. The projects include (i) delivery
escalation clauses that protect the Company of the LPG projects at Sapele and Oben, (ii)
against serious price decline. installation of booster compressors, and (iii)
the Sapele integrated gas plant project.
4 Additional Information 261 — 276
Other actions include focused delivery on
OPEC quota restriction alternative options for cleaner energy. The
Company has also put in place a calculator to
The risk was fully mitigated as at Q3 2021 estimate actual greenhouse gases emissions
and has been de-listed from the Company’s to determine actual carbon footprint/
risk register. emissions and determine measures for
reduction of greenhouse gases emissions.
Annual Report and Accounts 2021 Seplat Energy Plc 37
Risk management | continued
The Company demonstrated resilience and Conclusion
commitment to delivering the 2021 work programme
while proactively monitoring and managing In the course of the year 2021, the oil and gas
production costs across our operations.” industry recovered as oil prices rose to a peak
of $86/bbl in late October 2021 and the world
67 economy showed signs of improvement.
The unprecedented headwinds posed by
JV receivable and future cash Liquidity risk the Covid-19 pandemic continued to linger
call funding throughout the year, with emergence of new
The impact of higher oil prices in 2021 offset strains of the Coronavirus, the latest of which
Seplat Energy has the Nigerian Government the effect of outages on key export routes in is the Omicron variant.
as Joint Venture (JV) partner in significant Q3 and Q4 and this assisted Seplat’s liquidity
operations of its business. Cash call funding position significantly in the year. Despite the challenges and uncertainties
from the government partners has historically posed by the Covid-19 pandemic, the
been poor, resulting in build up of legacy cash We manage liquidity risk by ensuring that Company demonstrated resilience and
call receivables over time. In 2021, the sufficient funds are available to meet commitment to delivering the 2021 work
government JV partners continued to remain commitments as they fall due, using both programme while proactively monitoring
current in paying cash calls. However, the risk long-term and short-term cash flow and managing production costs across our
of cash calls sliding back to pre-2019 practice projections to monitor funding requirements operations, in order to reap the benefit of the
of late payments is still there. To mitigate this for activities; and to ensure there are sufficient oil price recovery and remain competitive.
exposure, the Company continues to manage cash resources to meet operational needs.
its JV relationships very closely and actively Our cash flow projections take into On project delivery, the Company made
engages the respective government partners consideration the Company’s debts and progress in key projects such as
on timely payment of cash calls. covenant compliance. Surplus cash held is operationalising the Amukpe-Escravos
transferred to the treasury department which pipeline, the completion of AGPC Gas Plant
invests in interest-bearing current accounts, and the Sapele Gas Plant upgrade. These
time deposits and money market deposits. projects are critical for the ability of Seplat
Energy to evacuate its production from the
core assets, demonstrate leadership in the
ESG space by putting out flares and ensuring
near-term growth for the Company.
Accordingly, the Company continued to give
priority to laying the foundation and renewed
focus towards strengthening its approach
and credibility on Environment, Social and
Governance (ESG) issues in response to
sustainability needs, as well as the
introduction of the Company’s footprint
and greenhouse gas (GHG) emissions
quantification.
Overall, the Committee is satisfied that the
Company has a robust risk management
system that serves to ensure integrity of
business processes, decisions and activities
going into the future. The Company’s HSSE
Management System is also mature and
reliable and has continued to deliver good
HSSE performance year on year.
Basil Omiyi
Chairman, Risk Management
and HSSE Committee
38 Seplat Energy Plc Annual Report and Accounts 2021
Mapping our risk Strategic Report 01—73
The mapping of our risks considered both quantitative and qualitative
factors. Seplat Energy’s risk mapping is underpinned by a two-factor
spectrum – Likelihood and Impact, which are further plotted on the
basis of Seplat Energy 5x5 methodology, to arrive at a final assessment
for each risk.
Consequences
Certain Governance Report 74 — 138
Expected 15 14
11
9
20 16
17 19 12 13
Likelihood 18 8 4 Financial Statements 139 — 260
Possible
5 1 26
Unlikely 3
7
Rare 10 Additional Information 261 — 276
Severe
Negligible Minor Moderate Significant
Assessment Topic Trend Topic Trend
Very high
High 1. Infectious diseases outbreak in Seplat 11. Changes to fiscal and tax status
Medium 2. Niger Delta Militancy/Third party interference 12. Bribery and corruption risk
Low 3. Portfolio concentration risk 13. Fraudulent activity risk
4. Sustaining E&A programme 14. Field operations and project deliverability
Movement trend 5. Oil price volatility 15. Geo-Political risk
Decreasing 6. Merger & acquisition (M&A) risk 16. Cost control risk
Increasing 7. Stakeholder management relationships 17. Foreign exchange risk
Steady 8. HSSE risks 18. Information security risk
9. Availability of capital 19. New Energy and Gas Market risk
10. Liquidity 20. Corporate Governance & Compliance risk
Annual Report and Accounts 2021 Seplat Energy Plc 39
Principal risks and uncertainties
Monitoring and
mitigating risks
Operational risks
Definition Mitigation Links Trends
Field operations and Focus on risk management at planning phase KPI/Performance metric Steady. We continue to redefine
project deliverability and mitigation plans activated. Compulsory our project management
‘peer-to-peer’ review for high-value projects • Net working interest approach for improved speed
Failure to manage operational activities and better project management techniques. production of delivery and efficiency, finalised
in line with planned expectations can Protracted land acquisition, preparation and rig the integration of the newly
lead to production misses, project startup have been contributory factors which • Operating costs per boe acquired Eland assets into
delays and cost overruns, high have received focused attention and significant our business, consolidate
production costs and earlier than process improvements and improved Strategic pillars performance across board,
expected field decommissioning. communications with JV partner and approving 1/2/3 maximise production, maintain
regulators to mitigate delays. Use of smart/ a strong balance sheet, and
intelligent wells to improve recovery and Assessment strategically position the
improved rig performance monitoring and Very high Company for future growth.
reporting to manage NPTs.
Third-party infrastructure Work is ongoing to secure a second export line KPI/Performance metric
downtime to complement Forcados. Continue to explore
• Net working interest Steady. Remarkably improved
export via barging as a back-up option in production uptime of Forcados export
system. However, risk trend is
An over-reliance on third-party extreme cases. FEED completed and outcome • Days downtime Steady, as there are indications
operated transportation infrastructure prepared for presentation to JV Partners to pave that the alternative AEP
can expose the Company to extended way for Contracting Strategy concurrence for • EBIT evacuation line will be in place
period of production being shut-in. Engineering, Procurement, Installation and early 2022, and will provide
Commissioning (EPIC) of Amukpe LTF Upgrade. Strategic pillars needed back-up in the event of
2/3 an outage of the TFP. Alternative
Finalising the Amukpe to Escravos pipeline (AEP) line (AEP) is scheduled for Q2
Assessment 2022 delivery..
project in a bid to provide a major alternative for Very high
crude evacuation in the core assets. The AEP
project is at 99.8% completion and crude
deliverability test conducted. Two contingency
tanks in Amukpe for partial storage during
shut-in over shorter periods.
HSSE risks Deployment of an HSSE Management System KPI/Performance metric Steady. Though the risk is
in line with best practices. Monitoring and inherent, we will continue
Oil and gas activities carry significant reporting of HSSE performance scorecards • HSE scorecards to deploy our HSSE risk
levels of HSSE risks if not properly at management and Board levels. Our HSSE management in line with best
managed. As activity levels continue systems and process are subjected to • LTIR practices and with strong
to increase there is a strong focus independent review and identified improvement emphasis on prevention.
on preventing major environmental initiatives are deployed. Continual focus on HSSE • TRIR
(including the emerging climate training and initiatives on incidence prevention.
change -GHG emissions risk), Emergency Response plan set for any eventuality Strategic pillars
health or safety incidents. and comprehensive Incident Review panels to 2/3/5
identify and channel lessons learnt to
improvement activities. Focus on the delivery of Assessment
projects earmarked to reduce and/or eliminate High
gas flaring as spelt out under the company’s
“Gas Flares Out Roadmap” and new energy
transition plan.
40 Seplat Energy Plc Annual Report and Accounts 2021
The implementation of our strategy can be Strategic pillars Strategic Report 01—73
hindered by various risks and uncertainties. 1 — Increase our resources
The risks that the Board considers most
significant are described here. 2 — Increase production and
improve its profitability
Our strategy
Page 26 3 — Develop gas to drive
Nigeria’s energy transition
4 — Pursue profitable new
opportunities
5 — Behave responsibly, and
share our success
Definition Mitigation Links Trends
Infectious diseases The Company’s leadership through the KPI/Performance metric
outbreak in Seplat
COVIMOG (monitoring and response team) • HSE scorecards Steady. Our risk landscape
remained largely stable with
(e.g. Covid-19) continued to sustain the Company business and • LTIR respect to existing exposures
observed all recommended preventive measures since our last update in 2020.
• TRIR The Company did well to manage Governance Report 74 — 138
Risk of an index case manifesting in advised by both the Presidential Task Force (PTF) the lingering impact of Covid-19
Strategic pillars (infectious disease outbreak),
Seplat offices or field locations. This and State Governments. Over 90% of employees 2/5 via a strategic management
vehicle called COVIMOG.
were fully vaccinated via a concerted Industry Assessment
leads to an unsuccessful initial control (OPTS) support, while PCR tests remained High
of index case (probably resulting in
mandatory for everyone carrying out activities
communal spread of the disease in the in the various areas of the company’s operation
Seplat community as a result of late
and Travel Advisory updates were shared with
detection of secondary contact cases staff. Provision continued to remain in place for
which may have had close contacts targeted tests of personnel in all locations as
with index case or close contacts with required. Follow up treatment of positive cases
other external primary sources). Risk continued to be managed and funded by the
also covers supply chain disruptions Company. Also, as facilitated by the Lagos State
emanating from the pandemic i.e. the Government, the Covid-19 booster dose
extent to which the disease will have vaccines are now readily available in Government
an impact on all key projects of the
Health centres, and the Company plans to keep
Company (including ANOH) as
on liaising with appropriate bodies in the industry
designed in the work programme
to facilitate this process. Manage press/publicity
(impacting the supply chain and
and communication to avoid mis-
major contractors scheduled to
communication/wrong press.
deliver in a few months).
Sustaining E&A Strict compliance with reservoir management KPI/Performance metric Steady. High grading our Financial Statements 139 — 260
programme guidelines. Building internal capacity with skilled exploration portfolio through a
sub-surface expertise. Drill a minimum of two • Reserve replacement thorough prospect-screening
Exploration and appraisal exploration wells, as well as continuous M&A exercise. In the near term, plan is
activities carry significant levels work to secure available opportunities at the Strategic pillars to commence exploration drilling
of subsurface risk. Sustained right price. 1/2/3 campaign in the West.
E&A drilling failure will impact the
Company’s ability to organically Assessment
replace reserves and production. Very high
Additional Information 261 — 276
Annual Report and Accounts 2021 Seplat Energy Plc 41
Principal risks and uncertainties | continued
External risks
Definition Mitigation Links Trends
Niger Delta stability The Company, working with other industry KPI/Performance metric Steady. Efforts by the government
and security players in the region, continues to put pressure and industry pressure groups,
on government to find a lasting solution to • LTIR aimed at enhancing security in
Seplat Energy’s core operations are Niger Delta restiveness and the current security the region seems to be paying off
located in the Niger Delta region of measures put in place by the facility operator, • TRIR as the business recorded zero
Nigeria and that comes with significant together with the government’s strategy of occurrence in militancy activities,
risks. Historically, the Niger Delta has dialogue with stakeholders in the region, seems • Security incidents similar to the previous year. We
always been a high-risk environment to be working. will continue our monitoring and
with security incidents such as • Operating cash flow vigilance.
kidnappings, vandalism and criminal
attacks on Oil and Gas installations.. Strategic pillars
2/3/5
Assessment
Very high
Stakeholder management Ensure consistent delivery of CSR initiatives KPI/Performance metric
relationships (as well as full compliance with the terms of the
GMoU) across all operational areas. Sustain local • Net working interest Steady. We continue to enjoy
production good working relations with
content development with priority to community our stakeholders.
Failure to manage stakeholders can contractors. Tailored CSR programmes, capacity • LTIR
result in business disruptions and
building and infrastructure developments with the • TRIR
interference. The Company prioritises host communities. Organisational focus and clear
the effective management of • Host community
strategy to deliver shareholder value pursued incidences
relationships with all stakeholders
by the Board and management. Corporate Strategic pillars
including host communities, JV 2/5
governance, transparency and proactiveness
partners, government, regulatory Assessment
in dealings with regulators and JV partners. High
bodies and shareholders.
Geo-political risk Scenarios and response options plan set. Crisis KPI/Performance metric Steady.
management team in place for high alert political
Nigeria has at times in its history faced periods. Continue to partner/network with • Occurrences of civil
political uncertainties and threats such security stakeholders and share intelligence unrest and terrorism
as terrorism aimed at de-stabilising regarding security. Business continuity plans
and undermining the orderly and actioned in light of current geo-political situation. Strategic pillars
effective rule of central government. 2/3/5
Assessment
High
42 Seplat Energy Plc Annual Report and Accounts 2021
Strategic pillars Strategic Report 01—73
1 — Increase our resources
2 — Increase production and
improve its profitability
3 — Develop gas to drive
Nigeria’s energy transition
4 — Pursue profitable new
opportunities
5 — Behave responsibly, and
share our success
Financial risks Our strategy
Page 26
Definition
Mitigation Links Trends
Oil price volatility
Hedging continues to be our price risk KPI/Performance metric Decreasing. In the year 2021, Governance Report 74 — 138
Oil prices have exhibited a history management tool. We conduct price we kept focus of our price risk
of volatility and can fluctuate sharply sensitisation on project economics and enforce • Realised oil price management policy to protect
in line with external factors. cost discipline for capital projects sanctioning. • Operating cash flow the Company’s cash flow stream
Aggressive focus on cost reduction. from downside scenarios. We will
Strategic pillars also continue to take hedge
2 positions and apply cost
reduction strategies.
Assessment
High
Changes to tax status Perform evaluation of business plan and KPI/Performance metric Steady. PIB was passed into law
and legislation performance metrics exclusive of tax benefits. as an Act (PIA) in August, 2021.
Project economics were determined on • Effective tax rate Impact on Seplat is assessed
If the tax regime/legislation under maximum tax basis to mitigate the impact of as moderate.
which the Company operates its the now expired pioneer tax status. Impact • Tax status
assets were to change, profitability assessment of potential tax legislature monitored
may be impacted. at the Board level. Strategic pillars
2/3
Assessment
High
Availability of capital Emphasis on compliance with requirements of KPI/Performance metric Financial Statements 139 — 260
the JV operating agreement for effective/strict JV
• JV receivables Decreasing. JV partners
The oil and gas industry is highly partner concurrence. Board review and approval continue to remain current
capital intensive. Significant amounts of financial strategy and debt portfolio • Capex in paying cash calls.
of capital are required to continue management with strong banking relationships.
• New M&A activities
development activities and fund M&A.
Strategic pillars
Non funding of cashcalls by JV partners 2/3/4
impacts activities and liquidity. Assessment
Very high
Cost control risk Comprehensive budgeting process approved KPI/Performance metric Steady. Cost discipline remains
by the joint venture partner and the Board. Clear a key focus of the business.
Cost reduction remains central to the cost management targets. Grading of portfolio • Operating cost per boe
Company’s current operating strategy. opportunities and project ranking for capital
High operating cost and ineffective allocation. Focus on reducing drilling costs at • EBIT
capital cost control negatively impacts well design phase. Cost monitoring and periodic
operating cash flows and profitability. reporting. Focus on effective contracting • Capex
strategies for cost reduction.
• Well costs
Additional Information 261 — 276
Strategic pillars
2/3/5
Assessment
High
Annual Report and Accounts 2021 Seplat Energy Plc 43
Principal risks and uncertainties | continued
Financial risks
Definition Mitigation Links Trends
Liquidity Manage liquidity risk by ensuring that sufficient KPI/Performance metric Decreasing. Improved uptime
funds are available to meet commitments as of TFP; improved JV cash call
Liquidity risk is the risk that the they fall due. Uses both long-term and • Operating cash flow payment; oil price rally; and
Company will not be able to meet its short-term cash flow projections to monitor • Capex strategic debt refinancing have
financial obligations as they fall due. funding requirements for activities and to ensure Strategic pillars all greatly improved liquidity risk.
there are sufficient cash resources to meet 1/2/3
operational needs. Cash flow projections take
into consideration the Company’s debts and Assessment
covenant compliance. Surplus cash held is Medium
transferred to the treasury department which
invests in interest-bearing current accounts,
time deposits and money market deposits.
Foreign exchange risk The Company has options to manage its foreign KPI/Performance metric Decreasing. Historically, the
exchange exposure including financial hedge Company holds the majority
The Company is exposed to exchange instruments such as forward exchange • Operating cashflow of its cash and cash equivalent
rate risk to the extent that balances contracts. • Capex in US dollar. Gas contracts are
and transactions are denominated Strategic pillars indexed in US dollar.
in a currency other than the US dollar. 2/3
Assessment
Low
Strategic risks
Definition Mitigation Links Trends
Portfolio Focus on portfolio expansion strategy from KPI/Performance metric Steady. The Company is in
concentration risk the Board level to diversify current portfolio. transform phase..
Integrated long-term planning on crude oil, • Successful execution of
High dependency on a concentrated gas and other renewables business. new acquisition and
portfolio of producing blocks and farm-in opportunities.
limited number of wells can leave
the Company more susceptible Strategic pillars
to declining long-term growth 2/3
and reserves depletion.
Assessment
High
44 Seplat Energy Plc Annual Report and Accounts 2021
Strategic pillars Strategic Report 01—73
1 — Increase our resources
2 — Increase production and
improve its profitability
3 — Develop gas to drive
Nigeria’s energy transition
4 — Pursue profitable new
opportunities
5 — Behave responsibly, and
share our success
Strategic risks Our strategy
Page 26
Definition MMititigigaattioionn LLininkkss TreTnrednsds
Merger & Acquisition New business development unit is always KPI/Performance metric Steady. DRB process in place to Governance Report 74 — 138
(M&A) risk looking for the right opportunities for Seplat. vet opportunities and deals. Risk
Decision review board (DRB) process is in place • Successful execution trend steady following ongoing
Growth through M&A activities is part to ensure deals are properly vetted and adequate of new acquisition and integration of Eland Oil and Gas
of the Seplat’s strategy to pursue a due diligence done on new opportunities. The farm-in opportunities Plc, as well as ongoing strategy
focused acquisition and farm-in. M&A DRB ensures the commercial, structural, KYC to acquire more strategic assets.
deals and transactions come with and integration risks are fully considered and Strategic pillars M&A landscape remains
significant risk including structural, addressed with mitigation plan approved and 1/3/4 competitive.
commercial and integration risks. in place prior to deal closing.
There is also the risk of non- Assessment
achievement of acquisition targets Very high
due to highly competitive landscape.
Bribery and Extensive training on anti-bribery and corruption. KPI/Performance metric Decreasing. Our geographical
corruption risk Embedding corporate governance principles with location continues to be
key focus on areas of the business which may • Whistle blowing reports; susceptible to corruption.
Bribery and corruption presents a risk be more susceptible to corruption such as the However, risk trend changed from
throughout the global oil and gas contracting and procurement process. Processes • Number of disciplinary steady to decreasing following
industry and represents an ongoing exist to guide dealings with public officials. cases lower cases of whistle blowing
risk to any oil and gas company. during the year.
Strategic pillars
5 Financial Statements 139 — 260
Assessment
Very high
Fraudulent activity risk Extensive whistleblowing campaign. Continuous KPI/Performance metric Steady. Risk is kept at very high
monitoring and improvement of the system of and the Company continues to
Fraudulent activity presents a risk internal controls by all lines of defence with • Number of reported maintain a zero tolerance policy.
throughout the global energy industry strong internal audit activity. Automation of cases
and represents an ongoing risk to any processes where possible to reduce manual
energy company. intervention. Strategic pillars
5
Assessment
Very high
Information security risk We monitor and regularly upgrade the KPI/Performance metric Steady. While cyber security
continues to hold international
Company’s information technology and security • Information security attention, there has not been
identification and a material IT breach on our
Potential cyber attacks and information systems. The Company has a clearly defined containment reports operations. However, the
technology security breaches could employee user policy and control of access triggering of the work from home
result in loss or compromise of rights. Our information security framework and Strategic pillars policy has resulted in a rising
sensitive proprietary information, infrastructure have been externally reviewed in 1/5 trend of the risk, giving the
communication and IT business line with requirements of ISO 27001. IT business greater number of employees
continuity disruption across operations. continuity plan is in place for quick deployment. Assessment working externally.
High
Additional Information 261 — 276
Annual Report and Accounts 2021 Seplat Energy Plc 45
Operational review
Operational
performance
We continue to actively develop our portfolio, high grading
our enlarged inventory of opportunities and maximising value
by focusing on those that offer the best cash returns.
HSE performance
Safe and responsible operations are critical to
the delivery of Seplat Energy’s strategy. Staff
and contractors worked a total of 8.0 million
man-hours with no fatalities, lost-time injuries,
or major injuries in the period.
The Company has achieved 24 million hours
without LTI on its operated assets. There were
88 HSE incidents in total, compared to 107 in
2020, including two reportable spills and six
gas leaks, all of which were remediated with
limited environmental impact.
Effiong Okon Onitsha
Operations Director
OML 4
OML 40
OML 41 Okwefe Oben
Sibiri Sapele Mosogar Okporhuru
Opuama
Gbetiokun
Ubaleme Amukpe Orogho
Ovhor
OML 38
Okoporo
Escravos Umuseti (Pillar) Jisike OML 53
Warri OPL 283 Igbuku (Pillar) Ohaji
South Owerri
Iheoma
Forcados Odinma
Emeabiam
Alaoma
Oil & gas producing assets Omerelu Owu
Oil producing assets Ubima
Port Harcourt
OML 55 Dama Krakama
Soku Akaso
Ke Bonny
Nembe
Bonny
Robert Kiri
Inda
Brass Belema
46 Seplat Energy Plc Annual Report and Accounts 2021
Strategic Report 01—73
Reserves and Seplat Energy’s portfolio comprises direct interests in seven oil and gas blocks Governance Report 74 — 138
resources and a revenue interest in one other block. This portfolio provides us with a robust
platform of oil and gas reserves and production capacity, as well as material
upside opportunities to add reserves through future development.
2P Reserves 2P reserves at 31/12/2021 2P reserves at 31/12/2020
At 31 December 2021, total working interest Liquids(1) Gas Total Liquids Gas Total
2P reserves, as assessed independently MMbbl Bscf MMboe
by Ryder Scott Company, L.P., stood at Seplat % 144 MMbbl Bscf MMboe
457.1 MMboe, comprising 219.2 MMbbls 45% 5 651 256
of oil and condensate and 1,379.4 Bscf of OMLs 4, 38 & 41 40% 39 68 17 156 693 275
natural gas (237.8 MMboe). The change OPL 283 40% 4 660
represents an organic decrease in overall OML 53 Fin. interest 25 153 5 66 17
2P reserves of 8.4% year on year, due to OML 55 45% 2 - 4
production of 10.6 MMbbls of liquids and OML 40 82% 219 - 44 742 172
39.4 Bscf of gas, and reclassification Ubima - 25
and revisions of previous estimates. Total 1379 2 50 5
457 27 0 27
40 4 Financial Statements 139 — 260
241 1501 499
1. E land has a 45% working interest in OML 40 until the Westport loan is fully repaid in accordance with the loan agreement,
reverting to 20.25%.
2. E land has an 82% Working Interest in the Ubima marginal field until the carry has been reached, reverting to 40%.
2C Resources 2C resources at 31/12/2021 2C resources at 31/12/2020
Working interest 2C resources stood at Liquids(1) Gas Total Liquids Gas Total
74.9 MMboe, comprising 40.9 MMbbls MMbbl Bscf MMboe
of oil and condensate and 197.1 Bscf of Seplat % 28 MMbbl Bscf MMboe
natural gas compared to 94.8 MMboe 45% 4 162 56
in 2020. The 21.1% decrease is mostly OMLs 4, 38 & 41 40% 4 21 8 48 167 77
due to the inability to prove producibility OPL 283 40% 3 14 6
in Mosogar following the unsuccessful OML 53 45% 2 0 3 4 21 8
Drill Stem Test (DST). Consequently, the OML 40 82% 41 0 2
Group’s working interest 2P reserves Ubima 3 15 6 Additional Information 261 — 276
and 2C resources stood at 531.9 MMboe Total 197 75
at 31 December 2021, comprising 260.1 30 3
MMbbls oil and condensate and 1,576.5
Bscf of natural gas (271.8 MMboe). 10 1
60 203 95
Annual Report and Accounts 2021 Seplat Energy Plc 47
Operational review | continued
Production Our oil and gas assets are in the onshore land and swamp areas of the prolific Niger Delta in
Nigeria. Principal areas of production are Edo, Delta, Imo and Rivers States with evacuation
for export through the Forcados, Bonny and Brass oil terminals. Seplat Energy has significant
opportunities within its reserves base to grow production and extend field life through infill
drilling, well intervention programmes, and innovation through technology deployment.
Working interest production 2021 WI production 2020 WI Production
Full-year total working interest production Liquids(1) Gas Total Liquids Gas Total
for 2021 averaged 47,693 boepd. Within boepd boepd
this, liquids production was down 13.7% Seplat % bopd MMscfd 36,844 bopd MMscfd 38,718
year on year. Delays in replacing the MT 45%
Harcourt storage vessel on OML 40 OMLs 4, 38 & 41 40% 18,243 107.9 1,012 21,249 101 970
reduced exports from the asset in the first OPL 283 40% 3,164 2,639
quarter of 2021. In addition, volumes were OML 53 45% 1,012 – 5,923 970 – 7,884
impacted by decreased production from OML 40 82%
the Western Assets owing to the disruption Ubima 3,164 – 749 2,639 – 971
caused by the suspension of exports at the 51,183
Forcados Oil Terminal (FOT) for significant 5,923 – 7,884 –
periods in the year.
749 – 971 –
The impact of unplanned downtime in the
second half of the year amounted to a Total 29,091 107.9 47,693 33,714 101
deferment of working interest production of
c.1.0 MMbbls of oil from OMLs 40, 4, 38 and 1. Liquid production volumes as measured at the LACT unit for OMLs 4, 38
41. There was a 75% production uptime for and 41, OML 40 and OPL 283 flow station. Volumes stated are subject to
the Trans Forcados System during the year. reconciliation and may differ from sales volumes within the period.
The impact of future FOT outages will be
alleviated by our use of the new Amukpe-
Escravos Pipeline, the launch of which is
imminent following mechanical completion
and introduction of hydrocarbons, with
only commercial agreements pending.
Gas volumes were up 6.9% year on year
to 107.9 MMscfd.
48 Seplat Energy Plc Annual Report and Accounts 2021
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