Seplat Energy Plc and other energy producers are projected to grow more given the rising demand for energy in Africa, which will see increased growth over the decade amidst current realities.
Global management consulting firm, Mckinsey & Company, disclosed this at the Seplat Industry Lecture, themed: “The Future of African Oil & Gas: Positioning for the Energy Transition,” and Dr. ABC Orjiako send forth, in Lagos, at the weekend.
“There will be rising demand for fossil fuels in Africa driven by industrialization and population growth. Energy demand growth will be led by Nigeria, and this will create tailwinds for energy suppliers like Seplat Energy,” Associate Partner and Co-Lead of West Africa Oil and Gas Practice, McKinsey & Company, Oliver Onyekweli, said in his presentation.
“Africa’s growing energy demand also creates opportunities for Seplat to explore renewable energy solutions – solar, blue hydrogen),” he added.
Decarbonizing production and cost leadership, Mckinsey explained, will be key going forward as capital providers continue to reduce exposure to oil and gas, with customers’ preference for lower carbon shipments.
Decarbonization of assets to the greatest possible extent, it added, will be needed to maintain “license to operate” and maintain access to capital at attractive rates. “As global oil demand peaks, maintaining cost leadership ($/bbl) will be increasingly vital.”
Indigenous producers will define the future of African oil and gas, as international oil companies (IOCs) will continue to face pressure to reduce carbon-intensive operations and lower cost of production, it said, adding that divestment is likely to continue.
Indigenous producers will define the future of African oil and gas, as international oil companies (IOCs) will continue to face pressure to reduce carbon-intensive operations and lower cost of production.
McKinsey continued: “Companies like Seplat Energy are well positioned to pick up producing assets going forward, provided they can maintain operational excellence. Ensuring continued access to talent will be key.
“African energy infrastructure is a compelling opportunity. As the energy transition accelerates, gas will become more prominent as a ‘transition fuel’, especially in Nigeria.
“Significant domestic gas demand is a positive tailwind for Seplat Energy’s ANOH project and gas’ cleaner carbon profile (relative to diesel) should make gas projects easier to finance (can be paired with LPG). Investing in gas export infrastructure (e.g. FLNG) could create an opportunity to access a high value international spot market.”
Speaking, Orjiako lauded stakeholders for the huge successes recorded since the company’s inception, saying they were products of hard-work, sleepless nights and resilience.
Commending the stakeholders for the great achievements recorded so far, the Chairman, Seplat Energy, Basil Omiyi, said this year marks a major turning point for the company as Dr. Orjiako retires from the Board after leading the Company to achieving monumental milestones over the last 13 years, including nine years as a listed entity.
Notable amongst the achievements were, the IPO vision, the listing, production growth, reserve addition, corporate governance, landmark acquisitions, funding strategy, setting the stage for corporate transformation, amongst others.
In his remarks, the CEO, Roger Brown, said Orjiako drove Seplat Energy’s long-term imperative with regards to global transition away from fossil fuels towards cleaner and renewable energies, advocating a Just Transition, which is to be conducted at an appropriate pace.
That, according to Brown, was why the Board under Orjiako decided to re-brand the Company as Seplat Energy, which is a signal of “our intent and how we see our future.”