NNPC, Chevron conclude conversion of assets into PIA terms

The Nigerian National Petroleum Company (NNPC) Limited and Chevron Nigeria Limited (CNL) announced that they have concluded the conversion of the five assets into the Petroleum Industry Act (PIA) terms.

NNPC, in a statement by its spokesperson, Olufemi Soneye, said the conversion is in line with the Petroleum Industry Act (PIA) 2021 provisions of transiting assets from the Petroleum Profit Tax (PPT) into PIA terms.

According to NNPC, under the new PIA regime, all existing Oil Prospecting Licences (OPLs) and Oil Mining Leases (OMLs) would be automatically converted to Petroleum Prospecting Licences (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,” NNPC said

“During a brief ceremony held at the NNPC Towers on Monday, 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.”

Speaking at the occasion, NNPC CEO, Mele Kyari, described CNL as one of the most reliable partners for 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,” he added.

Kyari assured CNL that NNPC Ltd 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 midwifery the conversion.

The Director, Deepwater and Production Sharing Contract (PSC) of CNL, Michelle Pflueger, who stressed the significance of the conversion for both companies, affirmed CNL’s long-standing commitment to the assets.

NNPC’s Executive Vice President, Upstream, Mrs. Oritsemeyiwa Eyesan, also noted 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.

Meanwhile, NNPC’s Chief Upstream Investment Officer, Bala Wunti, noted that the asset conversion is expected to significantly boost crude oil production, with the two partners focussing on attaining the 165,000 barrels of oil per day (bopd) production target by year-end, 2024.

Wunti said the continued importance of CNL’s operational philosophy in maintaining network stability and facilitating gas supply, especially to the domestic market.