Abuja — The Nigerian National Petroleum Company Limited (NNPC) yesterday announced that its Joint Venture (JV) with Chevron Nigeria Ltd (CNL) had concluded the conversion of five of its assets as dictated by the Petroleum Industry Act (PIA).
According to a statement by the Chief Corporate Communications Officer of the NNPC, Olufemi Soneye, the move was in accordance with the provisions of transiting assets from the Petroleum Profit Tax (PPT) into PIA terms as dictated by the new law.
Under the new PIA regime, the NNPC stated that all existing Oil Prospecting Licenses (OPLs) and Oil Mining Leases (OMLs) are expected to be automatically converted to Petroleum Prospecting Licenses (PPLs) and Petroleum Mining Leases (PMLs) upon their expiration.
Nonetheless, it said that an option of voluntary conversion was provided for holders of OPLs and OMLs (Operator, Licensees or Lessees) under the erstwhile Petroleum Profit Tax (PPT) regime.
The PIA terms, the national oil company said, are generally perceived as more investor-friendly, compared to the erstwhile PPT terms.
During a brief ceremony held at the NNPC Towers, the two partners signed documents on the conversion of the five OMLs into four PPLs and 26 PMLs, in line with the new PIA terms, marking a significant step towards increasing domestic gas supply and expanding global market presence.
Speaking on the occasion, Group Chief Executive Officer of the NNPC, Mr. Mele Kyari, described Chevron as one of the most reliable partners for the company.
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"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 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 (PSC) of CNL, Mrs. Michelle Pflueger who stressed the significance of the conversion for both companies, affirmed CNL's long-standing commitment to the assets.
In her remarks, NNPC 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.
In the same vein, NNPC Chief Upstream Investment Officer, Mr. 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 barrels of oil per day (bpd) production target by year-end 2024.
He emphasized the continued importance of CNL's operational philosophy in maintaining network stability and facilitating gas supply especially to the domestic market.
