Royalty payments to FG rose 153% in 10 years – Seplat

Seplat Petroleum Development Company Plc, a Nigerian independent oil and gas company, has said its royalty payments to the Federal Government rose by 153 percent to an average of $101 million in 2020.

Seplat disclosed this on Friday in a statement by the Company Secretary and General Counsel, Mrs Edith Onwuchekwa, following “some media coverage alleging improper conduct by the company”.

“Seplat is current on its royalties to the Federal Government of Nigeria, with a record of increased royalties over a decade of successful production,” it said.

According to the statement, Oil Mining Leases 4, 38 and 41 are held by Seplat in joint venture partnership with the Nigerian Petroleum Development Company Limited.

The company said in 2018, the President and Minister of Petroleum Resources approved the 20-year renewal of the assets, adding that it satisfied all conditions for the license renewal, including its full payment of $25.9 million renewal bonus.

“OMLs 4, 38 and 41 are amongst our various assets that continue to yield significant revenues for the Federal Government of Nigeria,” it added.

Seplat said it followed the prescribed process for applying for pioneer tax incentive through the Nigerian Investment Promotion Council, as the government body responsible for investment promotion.

It said at the time of the application, it was aware that, in line with the objective of the NIPC Act, the government intended to promote indigenous participation and investment in the oil and gas industry.

The company said, “Consequently, Seplat was one of 15 oil and gas companies that were granted the pioneer tax incentive. The Federal Government and the Federal Inland Revenue Service have long since recognised the pioneer tax incentive that was granted to Seplat.

“Indeed, after receiving the pioneer tax incentive, Seplat’s royalty payments to the Government have increased from an average of $40 million in 2010 to $101 million in 2020 for all assets.”

According to the statement, Seplat is not a shareholder of Cardinal Drilling Services Limited; neither is Seplat a party to (or a guarantor of) the loan facility that was granted to Cardinal Drilling.

“The circumstances around the loan facility between Access Bank and Cardinal Drilling are presently before the courts for adjudication,” it said.