In line with the Petroleum Industry Act (PIA) 2021 provisions of transiting assets from the Petroleum Profit Tax (PPT) into PIA terms, the NNPC Ltd. and its Joint Venture (JV) partner, Chevron Nigeria Ltd (CNL), have concluded the conversion of five of its JV assets into the PIA terms targeting 165,000 barrels of oil per day (bopd) by December.
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.
The PIA also gives operators the timeline of 18 months for voluntary conversion to PIA Fiscal terms, otherwise an operator can choose to wait until the expiration of its existing lease.
Daily Trust reports that 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.
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The PIA terms are generally perceived as more investor-friendly, compared to the erstwhile PPTA terms, a statement by Chief Corporate Communications Officer, Olufemi Soneye explained.
At 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.
Also in attendance was the industry regulator, the Nigeria Upstream Petroleum Regulatory Commission (NUPRC).
Speaking at the occasion, Group CEO NNPC Ltd., Mr. 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 midwifing the conversion.
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.
Also speaking, NNPC Ltd.’s Executive Vice President, Upstream, Mrs. Oritsemeyiwa Eyesan, stated that the conversion was a strategic move towards the successful implementation of the PIA.
The 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.
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