From Adanna Nnamani, Abuja
In a major milestone aligning with the Petroleum Industry Act (PIA) 2021, NNPC Ltd and its Joint Venture (JV) partner, Chevron Nigeria Ltd (CNL), have successfully completed the conversion of five JV assets to PIA terms. This transition marks a pivotal shift from the previous Petroleum Profit Tax (PPT) regime to a more investor-friendly framework.
Under the new PIA provisions, existing Oil Prospecting Licenses (OPLs) and Oil Mining Leases (OMLs) are automatically converted to Petroleum Prospecting Licenses (PPLs) and Petroleum Mining Leases (PMLs) upon expiration. The PIA offers a more favorable investment climate compared to the previous PPT terms.
At a ceremony held at NNPC Towers, the partners formalized the conversion of five OMLs into four PPLs and twenty-six PMLs. This strategic move is expected to enhance domestic gas supply and expand their global market presence. Group CEO of NNPC Ltd, Mr. Mele Kyari, praised Chevron for its steadfast partnership and commitment, acknowledging their role in the shallow water sector. Kyari expressed confidence in the continued collaboration, aiming to increase value for both parties and bolster Nigeria’s position in the domestic and export gas markets.
Mrs. Michelle Pflueger, Director of Deepwater and Production Sharing Contracts at CNL, emphasized the importance of the conversion, reaffirming Chevron’s dedication to the assets. NNPC Ltd’s Executive Vice President of Upstream, Mrs. Oritsemeyiwa Eyesan, highlighted the benefits of the PIA terms, underscoring the strategic nature of this conversion.
NNPC Ltd’s Chief Upstream Investment Officer, Mr. Bala Wunti, projected that the conversion will significantly boost crude oil production, with the JV setting an ambitious target of 165,000 barrels per day (bopd) by the end of 2024. He also emphasized Chevron’s crucial role in maintaining network stability and ensuring a reliable gas supply for the domestic market.