With an asset conversion arrangement, NNPC and Chevron JV aim to produce 165,000 barrels of oil per day

On Monday, NNPC Limited said that it had inked an agreement with Chevron Nigeria Ltd., or CNL, its joint venture partner, to convert five of its JV properties into terms outlined in the Petroleum Industry Act, or PIA. The arrangement is likely to dramatically increase crude oil production, the business revealed, with the two partners aiming to reach the 165,000 barrels of oil per day (bopd) production target by the end of 2024.

A statement by Chief Corporate Communications Officer, Mr Olufemi Soneye explained that the deal is in line with PIA 2021 provisions of transiting assets from the Petroleum Profit Tax (PPT) into PIA terms. Soneye stated 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.

He said: “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,” stated..

Group CEO NNPC Ltd, Mr. Mele Kyari, at event described CNL as one of the most reliable partners for the NNPC Ltd.

He was quoted as saying: “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”..

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.

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

On her part, 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.

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