Seplat Energy Plc has been upgraded to ‘B’ from ‘B-‘ by Fitch Ratings on its Long-Term Issuer Default Rating (IDR), confirming the company’s outlook to be ‘Stable’ and upgraded the company’s senior unsecured rating for $650 million senior notes due 2026 to ‘B’ from ‘B-‘.

The rating agency stated the upgrade reflects improved financial flexibility and a strong liquidity profile following debt refinancing in 2021, which in its view will help Seplat Energy survive for more than two years of force majeure without access to the Trans Forcados Pipeline (TFP).

In addition, it noted that Amukpe-Escravos Pipeline (AEP), an alternative oil export route, had been completed and is undergoing commissioning, according to Seplat, but said there is no certainty around when it will ship its first oil.

“The rating incorporates the small scale of Seplat Energy’s cash flows, concentration of the company’s asset base in Nigeria (B/Stable) and a historically unstable operating environment in the troubled Niger Delta, including recurring issues with the oil transportation system.

“ The rating also reflects moderate leverage, conservative financial policies, competitive unit profitability, end-2020 reserve life of 27 years, and a growing domestic gas business,” it noted.

Specifically, Fitch upgraded Seplat Energy’s $650 million bonds to B from B- with the upgrade reflecting improved financial flexibility and a strong liquidity profile following debt refinancing in 2021.

On ESG, Fitch said it had revised Seplat’s relevance ccore for human rights, community relations, access and affordability to ‘4’ from ‘5’ as deeper communication and cooperation between local communities, the government and Seplat have significantly reduced the number of attacks on oil infrastructure.