Seplat to Bring Back 400 Idle Wells Into Full Operation

Seplat to Bring Back 400 Idle Wells Into Full Operation

  • A major initiative to revive hundreds of Nigerian oil wells that have lain inactive is being initiated by Seplat Energy
  • Seplat aims to revive the nation's oil industry by raising production from idle oil wells and reactivating them
  • Only about 200 of the hundreds of inactive oil wells that Seplat plans to restart are currently producing

Legit.ng journalist Zainab Iwayemi has 5-year-experience covering the Economy, Technology, and Capital Market.

Following the completion of its $1.28 billion acquisition of ExxonMobil's onshore oil and gas assets in Nigeria, the continent's largest oil-producing nation, Seplat Energy Plc is starting a significant project to revive hundreds of dormant oil wells in Nigeria.

Seplat to reactivate 400 dormant oil wells
From about 50,000 barrels per day to almost 120,000 barrels per day, the London-listed company plans to triple its output. Photo Credit: Contributor
Source: Getty Images

By reactivating dormant oil wells and increasing production at these sites, Seplat hopes to revitalize the country's oil industry.

With the purchase of ExxonMobil's holdings, Seplat intends to reactivate hundreds of dormant oil wells, of which only approximately 200 are currently currently producing.

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In an interview with the Financial Times on Tuesday, Seplat's chief financial officer, Eleanor Adaralegbe, disclosed this forecast.

Over the course of six months, he said, the London-listed company intends to quadruple its output from around 50,000 barrels per day to nearly 120,000 barrels per day.

He said the assets had received relatively little investment up to this point, but he promised that once Seplat completely enters the market, there will be a chance to expand even more.

The London-listed business bought a variety of ExxonMobil's oil and gas assets in December, after the Nigerian Upstream Petroleum Regulatory Commission took over two years to approve the deal

With an asset base that includes 48 oil and gas fields, three export terminals, five gas processing facilities, and 11 onshore oil blocks, Seplat is now among the largest domestic producers following the $1.28 billion acquisition of Mobil Producing Nigeria Unlimited.

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Adaralegbe said,

“The assets have had very minimal investments until now. We expect that once we come in there will be an opportunity to grow that much further.”

Roger Brown, the CEO of Seplat, claims that with its combined assets, Seplat currently has 16% of Nigeria's production capacity.

As required by law in the nation's oil and gas sector, he said the company will manage the assets in cooperation with the state-owned Nigerian National Petroleum Company.

According to Brown, his organization is certain that it can collaborate with NNPC to increase total production, which is President Bola Tinubu of Nigeria's declared objective.

“We have no concerns working with NNPC.  There’s been a massive change with President Tinubu, realising that production is a great way of getting dollars into the country and supporting the currency,” Brown said.

Similarly, the firm’s Chief Operating Officer, Samson Ezugworie, noted that many of the Nigerian assets require time and investment so they can be produced again after being left idle.

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“We have over 600 wells drilled, and barely 200 of them are producing,” he said.
“We have significant idle wells that need to be rejuvenated and brought back into production within a short time.”

Exxon’s sale comes as international oil groups exit Nigeria’s troubled onshore and shallow water sector, which has been beset by decades of environmental damage and, more recently, by declining production.

Seplat targets 120,000 BPD in 6 months

Legit.ng reported that Seplat Energy Plc has unveiled plans to increase its crude oil production by 140% to 120,000 barrels per day.

The company’s Chief Financial Officer, Eleanor Adaralegbe, revealed in an interview with the Financial Times that they would increase output from the present 50,000 bpd to 120,000 bpd in H1 2025.

This move will position the oil and gas company to fill the vacuum caused by ExxonMobil’s exit from Nigeria’s onshore oil sector.

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Source: Legit.ng

Authors:
Zainab Iwayemi avatar

Zainab Iwayemi (Business Editor) Zainab Iwayemi is a business journalist with over 5 years experience reporting activities in the stock market, tech, insurance, banking, and oil and gas sectors. She holds a Bachelor of Science (B.sc) degree in Sociology from the University of Ilorin, Kwara State. Before Legit.ng, she worked as a financial analyst at Nairametrics where she was rewarded for outstanding performance. She can be reached via zainab.iwayemi@corp.legit.ng