Seplat Energy has announced a plan to invest up to $320 million this year to expand its oil production capacity and more than double its output to 140,000 barrels per day.
The decision follows the company’s recent acquisition of Exxon Mobil’s Nigerian assets and is part of a broader strategy to enhance its market position amid a challenging operating environment.
The investment will focus on the development of new wells and the enhancement of existing infrastructure, Seplat said in a statement released on Monday.
The company, which is listed on both the Nigerian Exchange (NGX) and the London Stock Exchange (LSE), reported a profit before tax of $379.4 million for 2024, up from $191 million recorded in the previous year.
Total revenue for the year also grew by 5% to $1.116 billion despite market volatility and foreign exchange challenges.
“Our commitment to increasing production is driven by our confidence in Nigeria’s energy sector and our strategic focus on delivering value to our stakeholders,” said Roger Brown, CEO of Seplat Energy. “This investment will not only boost our production capacity but also strengthen our ability to meet domestic energy demands sustainably.”
The move comes at a time when Nigeria, Africa’s largest oil producer, is striving to revamp its oil industry amid dwindling output and mounting fiscal pressures.
The government has recently intensified efforts to attract investments into the sector to bridge funding gaps and support its N13 trillion budget for 2025.
Seplat’s ambitious investment plan is expected to include drilling new wells, enhancing operational efficiency and reducing carbon emissions in line with its sustainability targets.
The company also indicated that a significant portion of the capital would be allocated to its Gas Business Division, which has been pivotal in supporting Nigeria’s domestic gas-to-power initiatives.
Analysts at Chapel Hill Denham described Seplat’s expansion plan as a “bold and necessary step” to offset declining output from mature onshore fields and leverage high international oil prices. “This move positions Seplat strategically to benefit from the ongoing recovery in global oil prices, provided it can manage the risks associated with infrastructure development and foreign exchange volatility,” said Bayo Adewale, an oil and gas analyst at the firm.
The increase in production is also expected to support Nigeria’s ambition to boost its crude exports, which have been hampered by pipeline vandalism and regulatory uncertainties.
The country’s crude production has struggled to exceed 1.3 million barrels per day in recent months, significantly below its OPEC quota of 1.8 million barrels per day.
