In line with the Petroleum Industry Act (PIA) 2021 provisions of transiting assets from the Petroleum Profit Tax (PPT) into PIA terms, the NNPC Ltd and its Joint Venture (JV) partner, Chevron Nigeria Ltd (CNL), have concluded the conversion of five of its JV assets into the PIA terms.
Under the new PIA regime, according to a statement signed by the Chief Corporate Communications Officer of NNPCL, Olufemi Soneye, all existing Oil Prospecting Licenses (OPLs) and Oil Mining Leases (OMLs) would be automatically converted to Petroleum Prospecting Licenses (PPLs) and Petroleum Mining Leases (PMLs) upon their expiration.
The statement added that 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.
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.
The Group CEO NNPC Ltd, Mr. Mele Kyari, in his remarks at the occasion, described CNL as one of the most reliable partners for the 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,” Kyari said.
He assured CNL that NNPCL would sustain its partnership with the JV partner so as to create more value for both parties and expand Nigeria’s footprints in the domestic and export gas markets.
He commended the Nigerian Upstream Petroleum Regulatory Commission (NUPRC) for its exemplary role in midwifing the conversion.
The Director, Deepwater and Production Sharing Contract (PSC) of CNL, Mrs Michelle Pflueger, who stressed the significance of the conversion for both companies, affirmed CNL’s long-standing commitment to the assets.
Also speaking, NNPC Ltd’s Executive Vice President, Upstream, Mrs Oritsemeyiwa Eyesan, highlighted the advantages of the PIA terms over the previous PPT terms, noting that the conversion was a strategic move towards the successful implementation of the PIA.
In his remarks, NNPC Ltd’s Chief Upstream Investment Officer, Mr Bala Wunti, noted that the assets conversion is expected to significantly boost crude oil production, with the two partners focusing on attaining the 165,000 barrels of oil per day (bopd) production target by year-end 2024.
He emphasized the continued importance of CNL’s operational philosophy in maintaining network stability and facilitating gas supply especially to the domestic market.
