Through the instrumentality of the provisions of the Nigeria’s Petroleum Industry Act (PIA) 2021 of transiting assets from the Petroleum Profit Tax (PPT) into PIA terms, state-owned NNPC and its Joint Venture partner, Chevron Nigeria Ltd (CNL), have concluded the conversion of five of its JV assets into the PIA terms.
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.
Under the voluntary conversion, an option was, nonetheless, provided for holders of OPLs and OMLs (Operator, Licensees or Lessees) under the Petroleum Profit Tax (PPT) regime. For all the stakeholders, the terms governing the PIA, are generally more investor-friendly, compared to the PPTA terms.
Chevron and NNPC had signed documents on the conversion of five OMLs into four PPLs and twenty-six PMLs, in compliance with the new PIA terms, which also means a significant shift, and a step aimed at increasing domestic gas supply and expanding global market presence.
NNPC Ltd’s Chief Upstream Investment Officer, Bala Wunti, noted that the assets conversion was expected to significantly boost crude oil production, with the two partners focusing on attaining the 165,000 bopd production target by year-end 2024.
Speaking at the occasion, Group CEO NNPC Ltd, Mele Kyari, said, “Over the years, Chevron has been a partner of choice that has not contemplated completely divesting or exiting (oil production in) the shallow water and we are proud of them.”
Kyari also assured Chevron that NNPC would sustain its partnership to create more value for both parties and expand Nigeria’s footprints in the domestic and export gas markets.
Michelle Pflueger, Director, Deepwater and Production Sharing Contract (PSC) of Chevron, stressed the significance of the conversion for both companies and affirmed the company’s long-standing commitment its Nigerian assets.
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.