NNPC Limited on Monday said it has reached an agreement with its Joint Venture partner, Chevron Nigeria Ltd (CNL), to transition five of their JV assets to comply with Petroleum Industry Act (PIA) terms.
Olufemi Soneye, Chief Corporate Communications Officer, stated that this agreement is anticipated to significantly enhance crude oil production. The partners aim to achieve a production target of 165,000 barrels of oil per day (bopd) by the end of 2024.
Soneye further explained that this deal aligns with the 2021 PIA provisions, which mandate the transition of assets from the Petroleum Profit Tax (PPT) framework to PIA terms. Under the new regime, existing Oil Prospecting Licenses (OPLs) and Oil Mining Leases (OMLs) will automatically be converted to Petroleum Prospecting Licenses (PPLs) and Petroleum Mining Leases (PMLs) upon their expiration.
He said: “Nonetheless, an option of voluntary conversion is provided for holders of OPLs and OMLs (Operator, Licensees or Lessees) under the erstwhile Petroleum Profit Tax (PPT) regime. The PIA terms are generally perceived as more investor-friendly, compared to the erstwhile PPTA terms.
“During a brief ceremony held at the NNPC Towers on Monday, the two partners signed documents on the conversion of five OMLs into four PPLs and twenty-six PMLs, in line with the new PIA terms, marking a significant step towards increasing domestic gas supply and expanding global market presence,” stated..
Group CEO NNPC Ltd, Mele Kyari, at the event, described CNL as one of the most reliable partners for NNPC Ltd.
He was quoted as saying: “Over the years, Chevron has been a partner of choice that has not contemplated completely divesting/exiting (oil production in) the shallow water and we are proud of them”..
Kyari assured Chevron Nigeria Ltd (CNL) that NNPC Ltd will continue to collaborate closely with the joint venture partner to enhance value for both parties and expand Nigeria’s presence in both domestic and export gas markets.
He also praised the Nigerian Upstream Petroleum Regulatory Commission (NUPRC) for its pivotal role in facilitating the conversion process.
Michelle Pflueger, Director of Deepwater and Production Sharing Contracts at CNL, emphasized the importance of this conversion for both companies and reaffirmed CNL’s ongoing commitment to the assets.
Oritsemeyiwa Eyesan, NNPC Ltd’s Executive Vice President of Upstream, highlighted the benefits of the new Petroleum Industry Act (PIA) terms compared to the previous Petroleum Profit Tax (PPT) terms, noting that the conversion represents a strategic advancement towards successful PIA implementation.
Bala Wunti, NNPC Ltd’s Chief Upstream Investment Officer, projected that the asset conversion will substantially increase crude oil production, with a joint goal of reaching 165,000 barrels of oil per day (bopd) by the end of 2024.