The Nigerian National Petroluem Company Limited and Chevron Nigeria Limited have successfully transitioned five of their joint venture assets to align with the PIA framework in compliance with the Petroleum Industry Act 2021.
This was disclosed in an X post by the Chief Corporate Communications Officer, Olufemi Soneye via his official account on Monday.
The new regulations under the PIA stipulate that all existing Oil Prospecting Licenses and Oil Mining Leases will be automatically converted to Petroleum Prospecting Licenses and Petroleum Mining Leases upon their expiration. Additionally, the PIA provides an option for voluntary conversion for holders of OPLs and OMLs from the previous Petroleum Profit Tax regime.
The PIA terms are widely viewed as more favorable for investors compared to the previous PPT arrangements.
On Monday, NNPC Ltd. and CNL formalized the conversion during a ceremony at the NNPC Towers, where they signed agreements to convert five OMLs into four PPLs and twenty-six PMLs. This move is expected to enhance domestic gas supply and bolster the companies’ presence in global markets.
Commenting, Group CEO 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 not contemplated completely divesting/exiting (oil production in) the shallow water and we are proud of them,” he added.
Kyari assured Chevron Nigeria Ltd. of NNPC’s ongoing commitment to their joint venture, emphasizing that the partnership aims to generate mutual value and broaden Nigeria’s presence in both domestic and export gas markets.
He Kyari also praised the Nigerian Upstream Petroleum Regulatory Commission for its pivotal role in facilitating the conversion process under the new Petroleum Industry Act (PIA) regulations.
The Director of Deepwater and Production Sharing Contracts at Chevron Nigeria Ltd. (CNL), Mrs. Michelle Pflueger underscored the critical importance of the recent asset conversion for both CNL and NNPC Ltd.
She reaffirmed CNL’s enduring commitment to these assets, emphasizing the company’s dedication to sustaining and enhancing their joint venture partnership.
Also speaking, NNPC Ltd.’s Executive Vice President, Upstream, Mrs. Oritsemeyiwa Eyesan emphasized the strategic advantages of the Petroleum Industry Act (PIA) terms compared to the previous Petroleum Profit Tax (PPT) regime.
She noted that the recent asset conversion represents a crucial step towards the effective implementation of the PIA, underscoring its role in driving industry progress.
In his remarks, NNPC Ltd.’s Chief Upstream Investment Officer, Mr. Bala Wunti highlighted that the recent asset conversion is anticipated to substantially increase crude oil production.
He noted that NNPC Ltd. and Chevron Nigeria Ltd. are targeting a production goal of 165,000 barrels of oil per day (bopd) by the end of 2024.
