The Nigerian National Petroleum Company Limited (NNPC Ltd.) and its Joint Venture (JV) partner, Chevron Nigeria Ltd. (CNL), have concluded the conversion of five of its JV assets into the Petroleum Industry Act (PIA) terms.
The NNPC Ltd. said the development was in line with the PIA 2021 provisions of transiting assets from the Petroleum Profit Tax (PPT) into PIA terms.
Group CEO, NNPC Ltd., Mr Mele Kyari, during the occasion of signing of documents on Monday in Abuja described CNL as one of the most reliable partners for the NNPC Ltd.
Kyari, in a statement by Mr Olufemi Soneye, Chief Corporate Communications Officer, NNPC Ltd. said over the years, Chevron had been a partner of choice that had not contemplated completely divesting/exiting (oil production in) the shallow water.
Under the new PIA regime, 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.
Nonetheless, an option of voluntary conversion is provided for holders of OPLs and OMLs (Operator, Licensees or Lessees) under the erstwhile PPT regime.
The PIA terms are generally perceived as more investor-friendly compared to the erstwhile PPT terms.
The two partners signed documents on the conversion of five OMLs into four PPLs and 26 PMLs, in line with the new PIA terms, marking a significant step towards increasing domestic gas supply and expanding global market presence.
Kyari assured CNL that NNPC Ltd. 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 underscored 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, said that the assets conversion was expected to significantly boost crude oil production.
Wunti said the two partners were focusing on attaining the 165,000 barrels of oil per day (bopd) production target by year-end 2024.
He emphasised the continued importance of CNL’s operational philosophy in maintaining network stability and facilitating gas supply especially to the domestic market.(NAN)
