Report on Payments to Governments for 2020

RNS Number : 4634R

Seplat Petroleum Development Co PLC

08 March 2021

 

Seplat Petroleum Development Company Plc

("Seplat" or "the Company")

REPORT ON PAYMENTS TO GOVERNMENTS FOR THE YEAR 2020

Lagos and London, 08 March 2021

Introduction

The following information is included to comply with the Disclosure and Transparency Rules of the Financial Conduct Authority in the United Kingdom and it is prepared in accordance with Directive 2013/34/EU (the EU Accounting Directive (2013).

BASIS FOR PREPARATION

Reporting entities 

This Report includes payments to governments made by Seplat Petroleum Development Company and its subsidiaries (Seplat). All payments to governments arise from operations within Nigeria.

Activities

Payments made by Seplat to governments arising from activities involving the exploration, prospection, discovery, development and extraction of minerals, gas processing, oil and natural gas deposits or other materials (extractive activities) are disclosed in this Report. It excludes payments related to refining, natural gas liquefaction or gas-to-liquids activities. When payments cover both extractive and processing activities and cannot be split, the payments have been disclosed in full.

Government

Government includes any national, regional or local authority of a country to which Seplat has made payment related to these regulations, and includes any department, agency or entity that is controlled by such authority.

Project

Payments are reported at project level except for payments that are not attributable to a specific project, these are reported at entity level. A project is defined as operational activities which are governed by a single contract, license, lease, concession or similar legal agreement, and form the basis for payment to government. However, if multiple of agreements are substantially interconnected, this shall be considered as a project.  Indicators of integration include, but are not limited to, geographic proximity, the use of shared infrastructure and common operational management.

Payments

The information is reported under the following payment types.

Production entitlements

These represent the government's share of production in the reporting period arising from projects operated by Seplat. It comprises of crude oil and gas attributable to the Nigerian government by virtue of its participation as an equity holder in projects within its sovereign jurisdiction (Nigeria).

Production entitlements to the government are lifted independently by the relevant government agency.

Royalties

These are payments for the rights to extract oil and gas resources, typically at a set percentage of revenue less any deductions that may be taken.

License fees, rental fees, entry fees and other considerations for licenses and/or concessions

These are fees and other sums paid as consideration for acquiring a license for gaining access to an area where extractive activities are performed. Administrative government fees that are not specifically related to the extractive sector, or to obtain access to extractive resources, are excluded. Also excluded are payments made in return for services provided by a government.

Corporate taxes

Corporate taxes are charges based on taxable profit which are payable to the government. Examples of corporate taxes in Nigeria include Petroleum Profit Tax (PPT), corporate income tax (CIT) and education tax.

Corporate income tax (CIT) is a tax imposed on profit of a company from all sources. Gas operations are liable to CIT.

Petroleum profit tax (PPT) is a tax applicable to upstream operations in the oil industry in lieu of corporate income tax. Oil operations such as oil mining, prospecting and exploration leases are liable to PPT.

Education tax is tax applicable to both oil and gas operations based on assessable profit. Assessable profit is the profit derived after deducting all the allowable expenses.

Other types of payments that are required to be disclosed in accordance with the Regulations are the following:

· Dividends

· Signature, discovery and production bonuses

· Infrastructure improvements

However, for the year ended 31 December 2020, there were no such reportable payments made by Seplat to government that were above the materiality threshold as determined below.

Materiality

For each payment type, total payments below £89,934 (€100,000, $122,760) whether made as a single payment or as a series of related payments, to a government agency are excluded from this Report .

Reporting currency

Payments in this report have been disclosed in US Dollars. Where actual payments have been recorded in a currency other than US Dollars, they have been translated using the annual average exchange rate.

REPORT ON PAYMENTS TO GOVERNMENTS 2020

Government and Expense Report (In USD)

	Production Entitlement	Royalties	Fees	Taxes	Total
GOVERNMENTS
Nigerian National Petroleum Corporation	389,575,992	-	-	-	389,575,992
Department of Petroleum Resources	-	111,632,919	18,376,189	-	130,009,108
Nigeria Export Supervision Scheme	-	-	579,361	-	579,361
Niger Delta Development Commission	-	-	17,934,968	-	17,934,968
Nigerian Content Development and Monitoring Board	-	-	4,826,290	-	4,826,290
Federal Inland Revenue Service	-	-	-	21,239,383	21,239,383
Total	389,575,992	111,632,919	41,716,808	21,239,383	564,165,102

Project and Expense Report (In USD)

	Production Entitlement	Royalties	Fees	Taxes	Total
PROJECTS
OML 4, 38 and 41	326,107,787	75,617,803	35,400,094	9,551,123	446,676,808
OML 17	-	-	1,002,000	39,645.77	1,041,646
OML 40	-	29,915,648	736,144	10,589,779	41,241,571
OML 53	63,468,205	5,750,039	4,292,293	-	73,510,536
OML 56	-	349,429	286,277	1,058,835	1,694,541
Total	389,575,992	111,632,919	41,716,808	21,239,383	564,165,102

- ENDS -

Enquiries

Seplat Petroleum Development Company plc
Emeka Onwuka, CFO	[phone]
Carl Franklin, Head of Investor Relations
Ayeesha Aliyu, Investor Relations	[phone]
Chioma Nwachuku, GM - External Affairs and Communications
FTI Consulting
Ben Brewerton / Sara Powell	[phone]
	[e-mail]

Notes to editors

Seplat Petroleum Development Company Plc is a leading indigenous Nigerian oil and gas exploration and production company with a strategic focus on Nigeria, listed on the Main Market of the London Stock Exchange ("LSE") (LSE:SEPL) and Nigerian Stock Exchange ("NSE") (NSE:SEPLAT).

Seplat is pursuing a Nigeria focused growth strategy and is well-positioned to participate in future divestment programmes by the international oil companies, farm-in opportunities and future licensing rounds.  For further information please refer to the company website, http://seplatpetroleum.com/

 

END

 

 

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