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Tuesday, June 28, 2022

Seplat Denies Improper Conduct on Pioneer Tax Status, Royalties

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Seplat Petroleum Development Company says it is current on its royalties to the Federal Government of Nigeria, with a record of increased royalties over a decade of successful production.

Seplat said in a statement released today that it deemed it necessary to clarify its position on the contents of some inaccurate media coverage. Reference in the media coverage was made to the assets that are held by Seplat in joint venture partnership with the Nigerian Petroleum Development Company Limited (NPDC).

These assets are OMLs 4, 38 and 41.

In 2018, the President and Honourable Minister of Petroleum Resources approved the 20-year renewal of OMLs 4, 38 and 41 and Seplat said it satisfied all conditions for the license renewal, including the 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,” Seplat said.

On the grant of pioneer tax status incentive, Seplat said it followed the prescribed process through the Nigerian Investment Promotion Council (“NIPC”), as the government body responsible for investment promotion.

At the time of the application, Seplat said 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.

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,” Seplat said.

Seplat said it is not a shareholder of Cardinal Drilling Services Limited; neither is it 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, the indigenous energy firm clarified.

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