The Nigerian National Petroleum Company Limited (NNPC Ltd.) and its Joint Venture partner, Chevron Nigeria Ltd., have concluded the conversion of five of its JV assets into the Petroleum Industry Act (PIA) terms.

The NNPC said the development was in line with the PIA 2021 provisions of transiting assets from the Petroleum Profit Tax (PPT) into PIA terms.

Group CEO of the NNPC Ltd., Mele Kyari, during the signing of documents on Monday in Abuja, described CNL as one of the most reliable partners for the NNPC Ltd.

Mr Kyari, in a statement by NNPC spokesman Olufemi Soneye, said over the years, Chevron had been a partner of choice that had not contemplated completely divesting/exiting (oil production in) the shallow water.

Under the new PIA regime, all existing Oil Prospecting Licences and Oil Mining Leases would be automatically converted to Petroleum Prospecting Licenses and Petroleum Mining Leases upon expiration.

Nonetheless, an option of voluntary conversion is provided for holders of OPLs and OMLs (operators, licensees or lessees) under the erstwhile PPT regime.

The PIA terms are generally more investor-friendly than the erstwhile PPT terms.

The two partners signed documents on converting five OMLs into four PPLs and 26 PMLs, which is in line with the new PIA terms, marking a significant step towards increasing domestic gas supply and expanding global market presence.

Mr 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’s exemplary role in midwifing the conversion.

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

NNPC Ltd’s executive vice-president, Upstream, Oritsemeyiwa Eyesan, highlighted the advantages of the PIA terms over the previous PPT terms, noting that the conversion was a strategic move towards successfully implementing the PIA.

NNPC Ltd’s chief upstream investment officer, Bala Wunti, said the conversion of the assets was expected to boost crude oil production significantly.

Mr Wunti said the two partners focused on attaining the 165,000 barrels of oil per day (bopd) production target by year-end 2024. He emphasised the importance of CNL’s operational philosophy in maintaining network stability and facilitating gas supply, especially in the domestic market.

(NAN)