Seplat, Waltersmith sign Crude Purchase Agreement

By Anthony Areh

Seplat Petroleum Development Company has signed a Crude Purchase Agreement (CPA) with Waltersmith Petroman Oil Limited to supply the latter between 2000-4000 barrel of oil per day (bopd) .

Mrs Edith Onwuchekwa, Company Secretary and General Counsel of Seplat, announced this in a notice posted on the website of the Nigerian Stock Exchange (NSE) on Tuesday in Lagos.

According to the notice, the transaction will eliminate crude oil losses, create local jobs and ensure that Nigeria’s crude oil is refined in Nigeria to boost economic growth.

It says 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.

Previously, Seplat’s share of Ohaji South crude was primarily evacuated to the export terminal via a third-party Crude Handling Agreement with Waltersmith.

The notice said that the new agreement would benefit Seplat by selling its crude oil directly to Waltersmith for refining, thereby eliminating crude losses and downtime experienced along the evacuation and export route.

Mr Roger Brown, Chief Executive Officer, Seplat, said in the notice: “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,” he said

Seplat maintains its guidance of 48,000 – 52,000 barrel of oil equivalent per day (boepd) for the 2020 financial year.

The transaction will 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, the notice said.