On Monday, NNPC Limited announced that it had signed an agreement with its joint venture partner, Chevron Nigeria Ltd (CNL), to convert five of its JV assets into the Petroleum Industry Act (PIA) terms.
This agreement is anticipated to increase crude oil production, with a target of 165,000 barrels of oil per day (bod) by the end of 2024.
According to Mr. Olufemi Soneye, the oil regulator’s Chief Corporate Communications Officer, the agreement aligns with the provisions for transitioning assets from the Petroleum Profit Tax (PPT) to PIA terms. Soneye said that under the new PIA regime, existing Oil Prospecting Licenses (OPLs) and Oil Mining Leases (OMLs) will automatically become Petroleum Prospecting Licenses (PPLs) and Petroleum Mining Leases (PMLs) upon expiration.
“Holders of OPLs and OMLs (operators, licensees, or lessees) under the previous Petroleum Profit Tax (PPT) regime have the option for voluntary conversion. The new PIA terms are generally considered more favourable to investors than the previous PPTA terms.” Soneye said.
A ceremony was held at the NNPC Towers on Monday, during which the two partners signed documents for the conversion of five OMLs into four PPLs and twenty-six PMLs in accordance with the new PIA terms. This marks a significant step towards increasing domestic gas supply and expanding global market presence.
Mr Mele Kyari, the Group CEO of NNPC Ltd, described CNL as a highly dependable partner and expressed assurance that NNPC Ltd would maintain its partnership with the joint venture partner to create more value for both parties and expand Nigeria’s influence in the domestic and export gas markets.
In addition, Mr Bala Wunti, NNPC Ltd’s Chief Upstream Investment Officer, stated that asset conversion is expected to bolster crude oil production significantly. The two partners are focusing on achieving the 165,000 barrels of oil per day (bpd) production target by the end of 2024.