- Big time oil player gets tossed off the big league as it wallows in debt
- Contractors unite to fight company management over unpaid fees
For SEPLAT Petroleum Development Company (SPDC), the season of harvest is almost over, the leaves of plenitude have fallen and the oil company fades against its earliest glories. It is as if the oil company has plowed its greenest pasture till it lost its lush and prosperous soil
As you read, the Managing Director (MD) of SEPLAT is experiencing his worst spell ever; besides the fact that SPDC’s share value has taken an abysmal plunge, the oil company is finding it difficult to pay its contractors for projects executed in its name. Consequently, the contractors who are equally finding it difficult to pay the salaries and fees of their staff and suppliers respectively, have launched concerted effort to establish an emergency pressure group to fight SEPLAT and claim their fees from the company.
Pundits and sources within the company claim that the persistent global oil glut is responsible for its inability to honour its financial obligations to its contractors and even its members of staff.
Findings revealed that the company’s profit after tax, at the end of the first quarter of 2015
amounted to N4.83 billion, this represents a significant drop of 33.4 per cent from last year’s proceeds. The forecasted full year profit stands at N20.21 billion, whereas, the company’s full year profit in 2014 stood at N40.48 billion. This means that the company might shed half of its last year profit this year, a tragic reality that frightens the management of the company even as you read. The Capital findings revealed that SEPLAT ‘s current financial situation is pitiful as it owes all its contractors and suppliers over five months’ remuneration for services rendered to it..
This doesn’t bode well for SEPLAT considering insinuations that aggrieved contractors owed by the company are spoiling for a showdown with it. This showdown may involve picketing its premises and shutting down its operations according to sources within the coalition of contractors owed by the company. The aggrieved contractors may also resort to legal action if the company’s management fail to live up to its obligations and pay them for services rendered.
SEPLAT until its recent misfortune, carved a niche for itself in the Nigerian oil and gas
sector as the first indigenous company to acquire and become operator of onshore oil and gas assets from international oil companies; this was in 2010 when the oil industry experienced a boom.
The current global oil glut however, has taken adverse effect on SEPLAT and other local and international oil companies. The falling oil price has seen many of these companies run at great loss. Some indigenous companies have even been forced to close down; worse hit are Seawolf
Lonestar and NRG Drilling. SeaWolf allegedly terminated the contract of about 450 workers who are being owed about two years salaries, and the company is reportedly unable to service the loan it acquired from First Bank of Nigeria, which caused the Assets Management Corporation of Nigeria (AMCON) to seize its oil rigs. And just recently, Oando Plc lost N188 billion to depressive economies.
The situation becomes more worrisome at the backdrop of the sad reality that sees most oil companies finance their operations through bank loans. This has become suicidal for most indigenous oil companies as the interest rate in the country escalates at two-digits, which makes it foolhardy for indigenous oil companies to seek loan facilities from banks, to run their businesses as there is no assurance of profit.
