The Nigerian National Petroleum Company Limited and its joint venture partner, Chevron Nigeria Ltd., have completed the conversion of five joint venture assets in accordance with the Petroleum Industry Act 2021.
Mr Bala Wunti, NNPC’s Chief Upstream Investment Officer, stated that the asset conversion is projected to dramatically increase crude oil output, with the two businesses aiming for 165,000 barrels per day by the end of 2024.
He emphasized the significance of Chevron’s operating strategy in preserving network stability and assuring a consistent supply of gas to the domestic market.
This transition comes after the change from the Petroleum Profit Tax regime to the more investor-friendly PIA conditions. According to NNPC’s Chief Corporate Communications Officer, Olufemi Soneye, the parties signed the relevant agreements during a ceremony on Monday.
The deal changed five oil mining leases into four petroleum prospecting licenses and 26 petroleum mining leases.
This conversion is an important step in increasing domestic gas supply and expanding Nigeria’s presence in the global market. According to PIA regulations, all existing Oil Prospecting Licenses and OMLs will automatically convert into PPLs and PMLs when they expire. Companies can, however, choose to change willingly under the PIA provisions.
NNPC’s Group CEO, Mele Kyari, praised Chevron for its long-term partnership.
“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 said.
Kyari further reassured Chevron of NNPC’s commitment to fostering the partnership, aiming to create mutual value and strengthen Nigeria’s role in both domestic and export gas markets.
Chevron’s Director of Deepwater and Production Sharing Contracts, Mrs Michelle Pflueger, affirmed the importance of the conversion for both companies and reiterated Chevron’s long-standing commitment to the JV assets.
NNPC Executive Vice President, Upstream, Mrs Oritsemeyiwa Eyesan, highlighted the strategic advantages of the PIA terms, emphasizing that the conversion is crucial to the successful implementation of the Act.
