Seplat Petroleum Development Company Plc has signed a crude purchase agreement (CPA) with Waltersmith Petroman Oil Limited.
The Company Secretary, Edith Onwuchekwa announced the deal in a statement on Tuesday.
“The CPA is for the supply of between 2,000 and 4,000 bopd from existing working-interest production from the Ohaji South Field within OML53, for Waltersmith’s new 5,000 bopd modular refinery at Ibigwe Field, in Imo state,” the statement read.
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“Previously, Seplat’s share of Ohaji South crude was primarily evacuated to the export terminal via a third-party crude handling agreement with Waltersmith.”
According to Seplat, selling its crude oil directly to Waltersmith for refining will eliminate losses and downtime experienced along the evacuation and export route.
The transaction, it added, will increase Waltersmith’s capacity in providing its products to the vicinity of Seplat’s operations.
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The chief executive officer of Seplat, Roger Brown, said: “We are delighted to sign this crude purchase agreement with Waltersmith as it ensures that Nigerian crude will be refined locally by a Nigerian refiner.
“The agreement will eliminate losses we previously experienced on the export pipeline, meaning more revenue will be booked by Seplat for the same amount of oil produced from the field.
“Waltersmith’s refinery will also benefit the Nigerian economy by creating local jobs to refine our oil.”
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According to Waltersmith, the new refinery has a crude oil storage capacity of 60,000 barrels and is expected to deliver about 271 million litres of refined petroleum products, including diesel, kerosene, heavy fuel oil (HFO), and naphtha, per annum to the domestic market.
By Peace Obi