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● While the partners aim for the JV’s oil production target of 165,000 barrels per day by December 2024
In line with the provisions of the Petroleum Industry Act (PIA), 2021 on the transfer of assets from Petroleum Profit Tax (PPT) to PIA terms, NNPC Ltd and its joint venture (JV) partner, Chevron Nigeria Ltd (CNL), have completed the conversion of five of its JV assets to PIA terms.
Under the new PIA regime, all existing Oil Prospecting Licences (OPLs) and Petroleum Mining Leases (OMLs) would be automatically converted into Oil Prospecting Licences (PPLs) and Petroleum Mining Leases (PMLs) upon their expiry.
However, there is a voluntary conversion option for OPL and OML holders (operators, licences or lessees) under the erstwhile Petroleum Profit Tax (PPT) regime. The PIA terms are generally perceived as more investor-friendly than the erstwhile PPTA terms.
In a brief ceremony held on Monday at NNPC Towers, the two partners signed documents on the conversion of five (5) OMLs into four (4) PPLs and twenty-six (26) PMLs, in line with the new PIA terms, marking a significant step towards increasing domestic gas supply and expanding global market presence.
Speaking at the event, Group CEO of NNPC Ltd, Mr. Mele Kyari, described CNL as one of the most reliable partners for NNPC Ltd. “Over the years, Chevron has been a partner of choice that has never contemplated the idea of completely divesting/abandoning (oil production in) shallow waters, and we are proud of that,” he added.
Kyari assured CNL that NNPC Ltd would maintain the partnership with the JV partner so as to create more value for both parties and expand Nigeria’s presence in the domestic and export gas markets.
He commended the Nigerian Upstream Petroleum Regulatory Commission (NUPRC) for its exemplary role in shepherding the conversion.
CNL Deepwater and Production Sharing Contract (PSC) Manager, Ms. Michelle Pflueger, emphasized the importance of the conversion for both companies and reaffirmed CNL’s long-standing commitment to these assets.
Speaking, the Executive Vice President, Upstream, NNPC Ltd, Mrs. Oritsemeyiwa Eyesan, highlighted the advantages of the PIA terms over the previous PPT terms, stressing that the conversion was a strategic move towards the successful implementation of the PIA.
In his address, the Chief Upstream Investment Officer of NNPC Ltd, Mr Bala Wunti, noted that the conversion of the assets is expected to significantly increase crude oil production, with the two partners focused on achieving the production target of 165,000 barrels of oil per day (bopd) by the end of 2024.
He stressed the continued importance of CNL’s operating philosophy in maintaining grid stability and facilitating gas supply, particularly to the domestic market.
Olufemi Soneye
Corporate Communications Manager
NNPC Public Limited Company
Abuja
September 9, 2024
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