By Taiye Olayemi
Lagos, Dec. 23, 2025
Seplat Energy Plc, a leading Nigerian independent energy company, has announced a significant strategic and regulatory milestone. The company confirmed that its subsidiaries, Seplat West Ltd. and Seplat East Onshore Ltd., have successfully completed the conversion of their operated onshore assets from the legacy Petroleum Profit Tax (PPT) regime to the new fiscal framework established by the Petroleum Industry Act (PIA).
The disclosure, made via the Nigerian Exchange Ltd., marks the culmination of a complex process initiated with conversion contracts in February 2023. The company and its joint venture partners have now satisfied all technical and regulatory requirements with the Nigerian Upstream Petroleum Regulatory Commission (NUPRC).
What Assets Were Converted and Why It Matters
The conversion encompasses assets formerly held under Oil Mining Leases (OMLs) 4, 38, 41, and 53. These are not minor holdings; in the first nine months of 2025, these assets averaged a working interest production of 42,591 barrels of oil equivalent per day (boepd). This output represents approximately 31% of Seplat’s total production during that period, underscoring the material impact of this transition on the company’s core operations.
The move from the PPT to the PIA regime is more than a bureaucratic update. The PIA, enacted in 2021 after decades of deliberation, was designed to overhaul Nigeria’s oil and gas sector. Its fiscal terms aim to:
- Simplify and Stabilize the Tax Environment: Replacing complex, investment-discouraging PPT calculations with a more predictable hydrocarbon tax and companies income tax structure.
- Incentivize Investment: By offering clearer, long-term fiscal terms, the PIA seeks to attract the capital needed to reverse Nigeria’s declining production trends and develop new fields.
- Improve Operational Efficiency: The act streamlines regulatory processes and governance, reducing administrative bottlenecks.
Seplat has stated that this new framework directly supports its corporate strategy for increased investment, production growth, and improved margins.
Strategic Implications and Forward Guidance
Seplat’s CEO, Mr. Roger Brown, highlighted the strategic importance: “Conversion to the PIA fiscal regime has been an important focus for Seplat… We recognise the enhanced value creation opportunities that we can benefit from, post conversion.”
Crucially, the company had already factored the anticipated benefits of this conversion into the medium-term guidance presented at its Capital Markets Day in September 2025. According to Brown, this move “lays a path to improved profitability and cashflow margins in our onshore business.” The financial markets will now watch closely for these projected improvements to materialize in the company’s earnings reports from 2026 onward.
Operationally, new Petroleum Mining Lease (PML) and Petroleum Prospecting Licence (PPL) numbers have been issued. Subject to final regulatory guidance, operations under the new PIA regime for these onshore assets are scheduled to commence on January 1, 2026.
The Road Ahead: Offshore Conversion and Sector-Wide Impact
Seplat’s work is not complete. The company has also signaled its next target: the conversion of its offshore assets to the PIA fiscal regime by 2027. This phased approach—onshore first, then offshore—is a common strategy, allowing companies to navigate the conversion process with manageable complexity.
Seplat’s successful completion of this major onshore conversion serves as a significant case study for the entire Nigerian oil and gas industry. It demonstrates that the transition envisioned by the PIA is achievable and provides a potential blueprint for other indigenous and international operators who are navigating the same regulatory shift. This milestone is a tangible step toward the investment-friendly, growth-oriented sector that the PIA was designed to create.
Edited by Olawunmi Ashafa
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