In accordance with the Petroleum Industry Act (PIA) 2021 provisions for 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 PIA terms.
Under the new PIA regime, all existing Oil Prospecting Licenses (OPLs) and Oil Mining Leases (OMLs) would automatically convert to Petroleum Prospecting Licenses (PPLs) and Petroleum Mining Leases (PMLs) upon 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.
The two partners signed documents on Monday at a brief ceremony at the NNPC Towers, converting five (5) OMLs into four (4) PPLs and twenty-six (26) PMLs in accordance with the new PIA terms, marking a significant step towards increasing domestic gas supply.
In a statement on Monday by the Chief Corporate Communications Officer of NNPC Ltd, Mr. Olufemi Soneye, the Group CEO of NNPC Ltd, Mr. Mele Kyari, described CNL as one of the most reliable partners for NNPC Ltd.
He said: “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.
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, 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 his remarks, 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 focussing on attaining the 165,000 barrels of oil per day (bopd) 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.
Leave a comment