With the increase in domestic oil price and increasing global demand, Seplat Energy Plc and four other companies listed under the Oil & Gas sector of the Nigerian Exchange Limited (NGX) reported N103.57 billion profit before tax in nine months ended September 30, 2022.
Others are Conoil Oil Plc, TotalEnergies Marketing Nigeria Plc, Eterna Plc, and MRS Oil Nigeria Plc. The five companies’ results released on the NGX showed that the pre-tax profit increased by 68.2 per cent from N61.57 billion reported in nine months of 2021 to N103.57 billion in the period under review.
In the global market, the average price of crude per barrel as of 30 September 2021 stood at $67.71 compared to the average price of the same products stood at $104.81 as of 30 September 2022.
Consequently, the Nigerian market has witnessed an increase in price of Premium Motor Spirit (PMS) or petrol to an average price of N179.42 in nine months of 2022 against an average price of N166.29 in the corresponding year of 2021, according to the National Bureau of Statistics (NBS).
The average retail price of Automotive Gas Oil (diesel), according to National Bureau of Statistics (NBS) in September 2022 was N789.90 per litre, an increase of 210.20 per cent from N254.64 per litre recorded in the corresponding month of the previous year.
The five companies grew revenue by 34 per cent to N847.28 billion in nine months of 2022 from N632.34 billion reported in nine months of 2021. According to the financial statements of the five oil and gas firms, TotalEnergies Marketing is the only company with decline in profit before tax to N18.78 billion in nine months of 2022 from N19.72 billion in nine months of 2021.
For Conoil, it reported 67.5 per cent increase in profit before tax to N3.93 billion in nine months of 2022 from N2.3 billion in nine months of 2021, while MRS Oil Nigeria recorded an unprecedented surge in profit before tax to N1.49 billion in nine months of 2022 from N306.98 million in nine months of 2021.
Seplat Energy reported 100.56 per cent increase in profit before tax from N38.63 billion in nine months of 2021 to N77.47 billion in the corresponding period of 2022, while Eterna announced 244.66 per cent increase in profit before tax from N566.89 million to N1.9 billion in nine months of 2022.
Capital market attributed the Oil & Gas companies’ performance to margin increase in price of petrol, diesel and lubricant, stressing that the impact is felt in the NGX Oil & Gas Index that has outperformed other NGX sectorial indices.
Findings by NATIONAL ECONOMY revealed that the NGX Oil & Gas Index on the Exchange has appreciated by 31.78 per cent as at November 11, 2022, while the NGX All-Share Index (ASI) recorded a Year-to-Date gain to 2.93 per cent.
On third quarter performance, the chief executive officer, Seplat Energy, Mr. Roger Brown, said, “despite an unusually challenging quarter for the Nigerian oil and gas industry, with key export routes being unavailable because of force majeure, we have demonstrated that we have a resilient business. The Amukpe-Escravos Pipeline has been operational since August and we have had our first oil export this month. The Trans Forcados Pipeline has now resumed operations and we continue to increase our use of alternative export routes, giving us confidence that the final quarter of the year will show some improvement in volumes.”
He stated that “we are working closely with all the relevant stakeholders on our transformational acquisition of Mobil Producing Nigeria Unlimited (MPNU) and remain confident that the proposed acquisition will be brought to a successful conclusion in accordance with the law. The acquisition will add significant reserves and production capacity that will strongly reinforce Seplat Energy’s position as Nigeria’s leading indigenous oil and gas producer.”
The president of Investors Alternative Dispute Resolution Initaitive (IADRI), Moses Igbrude said, “it is a good performance and an excellent result. This is despite the unfavorable economic environment where government is a competitor and sole importer of petrol, coupled with forex shortage, kudos to them.”
He noted that, “to improve on this performance, the companies should focus more on their competitive advantage areas such as lubricant production, diesel import, insecticide production as well as car services business and any other areas where they can make good margins in their business operations. They should also manage their cost effectively.”