Chido Nwakanma says that arbitration and Sound corporate governance are needed for Seplat Energy to remain competitive and global
Stakeholders in Corporate Nigeria and followers of its evolution must be apprehensive about the internal war at a leading player, Seplat Energy. The business community in Lagos and London has watched with bemusement and trepidation the unedifying statements and counterstatements emanating from the respected Seplat Energy since February 2023. Interested parties dragged internal corporate matters around management and corporate governance from the boardroom of the highly successful firm to the broadways of traditional and social media. To what end, analysts ask?
Seplat’s crisis took an international human resource management dimension with the expulsion of its British chief executive Mr Roger Brown on the grounds of non-compliance with Nigerian immigration laws. A laundry list of allegations trailed Brown: alleged discrimination against Nigerian staff and favouring expatriates. Backed by Nigerian authorities, the complainants removed Brown for now.
Outsiders can discern two groups engaged in the struggle for the soul of Seplat Energy. Pioneer chairman and cofounder Dr ABC Orjiako leads one group, while current independent chairman Basil Omiyi leads the other.
Seplat’s Board backs the current chairman, Omiyi. In one of its statements, the company claimed that the opposing side comprised only “five shareholders with a combined holding of just 161 shares”. No percentage was indicated. In contrast, “the company has received messages of support for Mr Brown from shareholders representing more than 50% of Seplat Energy’s share register or more than 235 million shares”.
Significantly, females in the company deployed the Seplat Women’s Awesome Network platform (fondly known as “SWAN”) to speak for Roger Brown, attesting that he promoted equality, inclusion, and diversity. SWAN affirmed that it had:” observed with dismay the misleading and distasteful public propaganda against our CEO, Roger Brown, owing to the blatantly false allegations in certain Petitions to the Ministry of Interior and the Federal High Court. Curiously, we are unable to identify any of the individuals alleging these falsehoods as our fellow employees – past or present. It is concerning that persons outside our employee population can purport to speak purposefully and publicly on our welfare. The unfortunate (but perhaps intended) consequence of these efforts is to disparage the sterling record of our corporate champion and steadfast cheerleader while diverting the much-needed time and resources of our Ministry of Interior and Courts away from legitimate concerns requiring their attention.”
Significantly, MSCI, an internationally respected and independent ESG ratings agency, published a report on Seplat in January 2023. It found no issue of the type against Mr Brown and the Board. In fact, in the area of Diversity and Discrimination, the Company scored a perfect 10. No controversies were found in any area, and the company received the top mark of 10 on 28 of the 26 metrics assessed.
Why does Seplat Energy matter? Seplat Energy is a home-grown Nigerian independent oil and gas exploration and production company listed on the Nigerian and London Stock Exchanges. It took root in 2009, with headquarters in Lagos.
Its share price on 10 April 2023 was NSE 1150.00 NGN and LSE 104.00GBX. Seplat Energy trades on the Nigerian Stock Exchange under the ticker SEPLAT and on the London Stock Exchange under SEPL.
Seplat Energy focuses on onshore assets in the Niger Delta. Its portfolio of assets includes interests in seven blocks in the Niger Delta covering an area of approximately 2,100 square kilometres.
The company’s production is primarily from OMLs 4, 38, and 41. Seplat operates them with the Nigerian National Petroleum Corporation (NNPC). Seplat Energy’s production is sold domestically in Nigeria and exported to international markets.
In addition to its oil and gas production activities, Seplat Energy is also involved in power generation through its ANOH Gas Processing Company (AGPC) subsidiary. The AGPC is developing a gas processing and distribution infrastructure project in the Niger Delta region to supply gas to power plants and industrial customers in Nigeria.
Seplat is significant as a Nigerian global corporate success story in the critical oil and gas exploration and production fields.
Significantly, Seplat Energy supplies enough processed gas to generate 30% of electricity in Nigeria. It is the first Nigerian company to earn the ISO 55001:204 Asset Management System Certification. The company envisions that “the greatest opportunity ahead of us is to supply the right mix of energy for Nigeria’s young and rapidly growing population and drive Nigeria’s transition to cleaner, more affordable energy accessible to all.”
The Securities & Exchange Commission stepped in on 28 March with a statement to investors. SEC said: “In line with its core investor protection mandate, the Commission has sought and obtained explanations from Seplat through its Board of Directors and the NGX, the primary exchange on which it is listed. The Commission notes that the Board has remained united and that the reported events have not affected the fundamentals of Seplat. However, the Commission encourages the Board to continue effective dialogue with all stakeholders in dealing with the issues. The Commission will continue to work with the Board of Seplat to monitor the situation and take effective measures to preserve the integrity and transparency of the capital market.”
Dialogue. Dispute resolution. The SEC approach to the Seplat Energy imbroglio is the right path. Board disputes begin as tiny matters that could cause a major conflagration. Experts identify several causes of Board challenges, including personality clashes, competing objectives, decision deadlocks, and inexperience.
We can rule out inexperience for the tested board of Seplat. Chairman Basil Omiyi is a veteran of boardrooms and the oil and gas industry; he was the first Nigerian managing director of the Shell Petroleum Development Company and its Country Director overseeing activities across some countries. Founding chairman ABC Orjiako is a veteran boardroom player and entrepreneur across sectors.
Whatever the root, it is crucial to resolve the Seplat Energy crisis quickly. They must observe guiding principles of dispute resolution, such as the imperative of fairness, putting things right and critical learnings from the outcomes. The balance of equity favours the existing Board that has enormous support. It is important to remember the entrepreneurial ingenuity that birthed the company.
A poster boy of growth and success in Corporate Nigeria must continually hold the banner of good corporate governance. Stability is one critical indicator of corporate governance. They must retain and respect the corporate speak on sustainability. Arbitrators may need to come in and ensure that no one loses face and that Nigerian and global investors do not lose funds or interest.
Chido Nwakanma: For Seplat Energy to remain competitive and global
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