Seplat Petroleum Development Company Plc (NSE: SEPLAT) and Waltersmith Petroman Oil Limited has announced a Crude Purchase Agreement (CPA) between the two companies. This is according to a publication sent by SEPLAT to the Nigerian Stock Exchange.
The CPA is for the supply of between 2,000 and 4,000 bopd from existing working-interest production from the Ohaji South Field within OML53, for Waltersmith’s new 5,000 bopd modular refinery at Ibigwe Field, in Imo State.
Waltersmith Refining & Petrochemical Company Limited (WRPC) is currently developing a 50,000bpd refinery situated near the Ibigwe Field flowstation through a phased expansion strategy.
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The first phase which is the 5,000bpd was commissioned on the 24th of November and is expected to deliver about 271 million litres of refined petroleum products into the domestic and regional market consisting of Heavy Fuel Oil, Dual Purpose Kerosene and Automotive Gas Oil.
The groundbreaking of WS’s 45,000bpd refinery was also carried out on the 24th of November and comprises a stand-alone 25,000bpd condensate refinery as well as the addition of a 20,000bpd refinery to bring the combined capacity of the complex to 50,000bpd.
Prior to this agreement, Seplat’s share of Ohaji South was primarily evacuated to the export Terminal via a third-party Crude Handling Agreement with Waltersmith. This new agreement benefits Seplat by selling its crude oil directly to Waltersmith for refining, thereby eliminating crude losses and downtime experienced along the evacuation and export route.
The transaction would also boost the capacity of Waltersmith in providing its products particularly to the immediate region of our operations thereby supporting Seplat’s commitment to national energy security.
Speaking about the agreement, Roger Brown, Chief Executive Officer of Seplat, said:
“We are delighted to sign this Crude Purchase Agreement with Waltersmith as it ensures that Nigerian crude will be refined locally by a Nigerian refiner. The agreement will eliminate losses we previously experienced on the export pipeline, meaning more revenue will be booked by Seplat for the same amount of oil produced from the field. Waltersmith’s refinery will also benefit the Nigerian economy by creating local jobs to refine our oil.”
Seplat is a leading independent oil and natural gas producer in the prolific Niger Delta area of Nigeria. The Company’s focus is on maximising hydrocarbon production and recovery from its existing assets, acquiring and farming into new opportunities in Nigeria (specifically those which offer production, cash flow and reserve replacement potential, with a particular focus on the onshore and shallow water offshore areas) and realising the upside potential within its portfolio through exploration and appraisal activities.
By; Nnamdi M.