ABC Orjiako, chairman of Seplat told Oil Review Africa that the low oil price environment, as well as Nigerian local content requirements, present opportunities for the company
The Nigerian E&P company has weathered the storm created by the oil downturn "very well" according to Mr Orjiako when he spoke to Oil Review Africa at the Africa Oil Week conference in Cape Town this week. He described the current challenges as "surmountable". Keeping an eye on costs, fiscal discipline and alternative routes for oil were all cited by Mr Orjiako as solutions for ongoing success.
Embracing exploration and production of gas has emerged as a theme of the conference and Mr Orjiako echoed the sentiments of many of the first day's speakers when he told Oil Review Africa about Seplat's plans for gas expansion, with a goal of 1bcf/day production by 2018. The growth markets of gas-to-power, gas-to-industry and gas-to-agriculture are the focuses for Seplat.
He pointed out that Nigeria has 80 mn people but 6,000 MW of capacity, compared to 50,000 MW for South Africa, with a population of 50 mn.
"The power deficit is a huge investment opportunity," said Mr Orjjiako.
Gas-to-agriculture projects are essential for feeding a growing population as well as creating employment in rural areas, he told Oil Review Africa. In regard to gas-to-industry, he said this will support the growing petrochemical sector, another source of revenue and employment for Nigerians.
"This will impact the bottom line," he said, adding that gas expansion will "lead to job creation and prosperity".
Meeting Nigeria's local content requirements is also an opportunity, according to Mr Orjiako. He used the example of pipeline security as a way to engage local communities. By employing local people as contractors for security, community engagement is achieved and local people become stakeholders. As a result, Seplat's Niger Delta pipelines have achieved three years without any vandalism incidents.
"The community is part of the operations, there is a collective responsibility," he said.
Mr Orjiako sees employing local people as an important part of Seplat's CSR programme, along with funding medical clinics, and programmes for eye health and maternal care.
"Nigerian content is an astronomical area of opportunity for oil and gas," he said.
Looking ahead, Mr Orjiako said Seplat was looking at opportunities to expand offshore in the Gulf of Guinea, as long as any expansion is "value-driven". While speakers on the first day spoke about monetising helium from natural gas development, Mr Orjiako said that it was not a focus for Seplat's gas projects but would not rule it out either.
In terms of oil price predictions, he said it is better to focus on things that operators can control such as costs.