Payments made by Seplat Energy to governments arising from activities involving the exploration, prospection, discovery, development and extraction of minerals, gas processing, oil and natural gas deposits or other materials (extractive activities) are always disclosed.
It excludes payments related to refining, natural gas liquefaction or gas-to-liquids activities. When payments cover both extractive and processing activities and cannot be split, the payments have been disclosed in full.
Government includes any national, regional or local authority of a country to which Seplat Energy has made payment related to these regulations, and includes any department, agency or entity that is controlled by such authority.
Payments are reported at project level except for payments that are not attributable to a specific project, these are reported at entity level. A project is defined as operational activities which are governed by a single contract, license, lease, concession or similar legal agreement, and form the basis for payment to government. However, if multiple of agreements are substantially interconnected, this shall be considered as a project. Indicators of integration include, but are not limited to, geographic proximity, the use of shared infrastructure and common operational management.
The information is reported under the following payment types:
These represent the government’s share of production in the reporting period arising from projects operated by Seplat Energy. It comprises of crude oil and gas attributable to the Nigerian government by virtue of its participation as an equity holder in projects within its sovereign jurisdiction (Nigeria). Production entitlements to the government are lifted independently by the relevant government agency.
These are payments for the rights to extract oil and gas resources, typically at a set percentage of revenue less any deductions that may be taken.
License fees, rental fees, entry fees and other considerations for licenses and/or concessions
These are fees and other sums paid as consideration for acquiring a license for gaining access to an area where extractive activities are performed. Administrative government fees that are not specifically related to the extractive sector, or to obtain access to extractive resources, are excluded. Also excluded are payments made in return for services provided by a government.
Corporate taxes are charges based on taxable profit which are payable to the government. Examples of corporate taxes in Nigeria include Petroleum Profit Tax (PPT), corporate income tax (CIT) and education tax.
Corporate income tax (CIT) is a tax imposed on profit of a company from all sources. Gas operations are liable to CIT.
Petroleum profit tax (PPT) is a tax applicable to upstream operations in the oil industry in lieu of corporate income tax. Oil operations such as oil mining, prospecting and exploration leases are liable to PPT.
Education tax is tax applicable to both oil and gas operations based on assessable profit. Assessable profit is the profit derived after deducting all the allowable expenses. Other types of payments that are required to be disclosed in accordance with the Regulations are the following: Dividends; Signature, discovery and production bonuses; and Infrastructure improvements.
Our performance in the use of energy is part of the indices for defining operational excellence.
Committed to driving positive socio-economic benefits for our country and our host communities.
In a local industry where others would settle for being “responsible”, we hold ourselves to a higher standard.