Nigeria’s post-reform energy framework recorded a major milestone as Seplat Energy Plc confirmed the full conversion of its operated onshore assets to the Petroleum Industry Act (PIA) fiscal regime—a move that strengthens cash flows, clarifies fiscal terms, and sharpens investment visibility across its core portfolio.
The disclosure, filed on Nigerian Exchange Ltd., signals Seplat’s successful transition from the legacy Petroleum Profit Tax (PPT) framework to the PIA’s modern fiscal architecture for its onshore operations.
What Converted—and Why It Matters
The conversion was executed by Seplat subsidiaries Seplat West Ltd. and Seplat East Onshore Ltd., covering assets formerly operated under Oil Mining Leases (OMLs) 4, 38, 41 and 53. These assets delivered average working-interest production of 42,591 barrels of oil equivalent per day (boepd) in the first nine months of 2025—about 31% of Seplat’s total output over the period.
From an energy economics standpoint, this is not a technical footnote. The PIA introduces clearer royalty structures, competitive tax rates, and stronger investment incentives, reducing fiscal friction that historically constrained onshore capital allocation. For operators, the payoff is predictability—the currency of long-cycle upstream investment.
PIA as a Growth Enabler
Seplat said the PIA framework aligns squarely with its strategy to accelerate investment, grow production, and improve operating efficiency. Importantly, the company had already embedded the expected impact of the conversion into its medium-term guidance unveiled at its Capital Markets Day in September 2025—underscoring disciplined planning rather than reactive compliance.
The transition followed the execution of conversion contracts in February 2023 and the completion of all technical and regulatory milestones with the Nigerian Upstream Petroleum Regulatory Commission (NUPRC). New Petroleum Mining Lease (PML) and Petroleum Prospecting Licence (PPL) numbers have been issued, with PIA-based operations expected to commence January 1, 2026, subject to final regulatory guidance.
Leadership View: Value Creation Unlocked
Chief Executive Officer Roger Brown framed the conversion as a decisive value unlock:
“Conversion to the PIA fiscal regime has been an important focus for Seplat. We are delighted to have delivered—along with our JV partners—the conversion of our onshore operated assets within the timeline outlined at our Capital Markets Day. We recognise the enhanced value creation opportunities post-conversion.”
Brown added that the PIA transition lays a clear path to improved profitability and stronger cash-flow margins across Seplat’s onshore business—an outcome investors have long sought amid Nigeria’s reform journey.
What’s Next: Offshore in the Crosshairs
With onshore conversion complete, Seplat has set its sights on offshore asset conversion by 2027. That timeline matters. Offshore barrels typically require larger, longer-dated capital commitments; securing PIA clarity ahead of major spend decisions will be pivotal to unlocking reserves and optimizing development sequencing.
BRANDECONOMY Insight
Seplat’s onshore conversion is a proof-of-execution moment for Nigeria’s PIA. It shows that operators who move early—aligning contracts, regulators, and partners—can translate reform into tangible financial outcomes. For the broader sector, the signal is encouraging: policy certainty is returning, and with it, the prospect of sustained upstream investment.
As Nigeria competes for global capital in a tighter energy market, seamless PIA implementation—onshore and offshore—will separate reform rhetoric from results. Seplat’s transition puts it firmly in the latter camp.
