By Adedapo Adesanya
The Nigerian National Petroleum Company (NNPC) Limited has signed a deal with its Joint Venture (JV) partner, Chevron Nigeria Limited, for the conversion of five of its JV assets into the Petroleum Industry Act (PIA) terms.
A statement by Chief Corporate Communications Officer, Mr Olufemi Soneye, on Monday disclosed that the deal is expected to significantly boost crude oil production, with a focus on attaining the 165,000 barrels of oil per day production target by year-end 2024.
The state oil firm explained that the deal is in line with PIA 2021 provisions of transiting assets from the Petroleum Profit Tax (PPT) into PIA terms stating that 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 Petroleum Profit Tax (PPT) regime. The PIA terms are generally perceived as more investor-friendly compared to the erstwhile PPTA terms.
“During a brief ceremony held at the NNPC Towers on Monday, the two partners signed documents on the conversion of five OMLs into four PPLs and twenty-six PMLs, in line with the new PIA terms, marking a significant step towards increasing domestic gas supply and expanding global market presence,” the statement stated.
Speaking at the event, the chief executive of NNPC, Mr Mele Kyari, said, “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.”
Mr Kyari assured Chevron that NNPC would sustain its partnership with the JV partner 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 carrying out the transition.
Also speaking, the Director of Deepwater and Production Sharing Contract at Chevron, Mrs Michelle Pflueger, stressed the significance of the conversion for both companies and affirmed the firm’s long-standing commitment to the assets.
Adding her input, NNPC’s Executive Vice President for Upstream, Ms 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.
Also, NNPC’s Chief Upstream Investment Officer, Mr Bala Wunti, noted that the conversion of the assets is expected to significantly boost crude oil production, with the two partners focusing on attaining the 165,000 barrels of oil per day production target by year-end 2024.
Modupe Gbadeyanka