In a landmark move for Nigeria’s energy sector, Seplat Energy Plc has successfully navigated a critical regulatory transition. The company announced via the Nigerian Exchange Ltd. that its subsidiaries, Seplat West Ltd. and Seplat East Onshore Ltd., have formally completed the conversion of their operated onshore assets from the old Petroleum Profit Tax (PPT) regime to the new fiscal framework established by the Petroleum Industry Act (PIA). This conversion, finalized with the Nigerian Upstream Petroleum Regulatory Commission (NUPRC), is not merely a procedural update but a strategic pivot with profound implications for Seplat’s future and the broader investment landscape in Nigeria.
Decoding the Assets and Scale of the Conversion
The transition encompasses assets previously held under Oil Mining Leases (OMLs) 4, 38, 41, and 53. To grasp the magnitude, these converted assets are substantial revenue drivers for Seplat, accounting for an average working interest production of 42,591 barrels of oil equivalent per day (boepd) in the first nine months of 2025. This figure represents approximately 31% of Seplat’s total production during that period, underscoring the conversion’s core operational and financial significance. The shift to new Petroleum Mining Lease (PML) and Petroleum Prospecting Licence (PPL) numbers marks the official administrative handover, with operations under the PIA slated to commence on January 1, 2026, pending final regulatory guidance.
Beyond Headlines: The Strategic Rationale of the PIA Regime
Why is this conversion so pivotal? The PIA, enacted in 2021 after decades of deliberation, was designed to replace Nigeria’s outdated and often unpredictable oil and gas fiscal laws. For companies like Seplat, moving from the PPT regime to the PIA’s Hydrocarbon Tax and Companies Income Tax structure offers several key advantages:
- Enhanced Predictability: The PIA provides a clearer, more stable fiscal environment, reducing regulatory uncertainty that has long deterred investment.
- Incentives for Investment: The new regime includes provisions like lower tax rates for deepwater operations and incentives for gas development and frontier basins, although Seplat’s current conversion focuses on its onshore portfolio. The framework is designed to reward production growth and operational efficiency.
- Improved Margins: As CEO Roger Brown indicated, the conversion “lays a path to improved profitability and cashflow margins.” This is achieved through a fiscal system that is more aligned with modern industry practices and potentially offers better terms for developed fields.
This strategic alignment was significant enough that Seplat had already factored the anticipated benefits into the medium-term guidance presented at its Capital Markets Day in September 2025.
Execution and Forward Momentum
Seplat’s achievement follows the execution of conversion contracts in February 2023 and culminates a rigorous process of meeting all technical and regulatory requirements with the NUPRC alongside its joint venture (JV) partners. This collaborative success with JV partners highlights the complex stakeholder alignment required for such transitions. Looking ahead, Seplat has set its sights on a more ambitious goal: the conversion of its offshore assets to the PIA fiscal regime by 2027. This forward-looking target signals the company’s commitment to fully aligning its entire portfolio with the new law, which could unlock further value and operational synergies.
Broader Implications for Nigeria’s Energy Sector
Seplat’s successful conversion serves as a critical test case and a positive signal for the Nigerian energy industry. It demonstrates that the PIA’s implementation is progressing from policy into practice for major indigenous players. This milestone may encourage other independent and international oil companies to advance their own conversion processes, thereby accelerating much-needed investment into the country’s oil and gas infrastructure. Ultimately, the intended ripple effect is a more competitive, efficient, and attractive sector that can boost national production and revenue.
In conclusion, Seplat’s completion of the onshore asset conversion is more than a corporate announcement; it is a strategic maneuver that de-risks a significant portion of its business, unlocks enhanced fiscal terms, and reinforces its commitment to long-term growth within Nigeria’s reformed energy landscape. The focus now shifts to the execution of this new regime from January 2026 and the pursuit of the offshore conversion, which will be the next chapter in this transformative corporate journey.
Edited by Olawunmi Ashafa
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