The Nigeria National Petroleum Company Ltd (NNPCL) and its joint venture partner Chevron Nigeria Limited have completed the transfer of five of its Joint venture assets into the terms of the Petroleum Industry Act (PIA) signed into law in 2021.
In a statement signed by the NNPC Ltd’s Chief Corporate Communications Manager, Olufemi Soneye, disclosed that the two partners signed the deal in a ceremony on Monday at the NNPC towers, in Abuja.
This transferred the assets from Petroleum Profit Tax (PPT) into PIA terms.
According to the statement, existing Oil Prospecting Licenses (OPLs) and Oil Mining Leases (OML) will be converted to Petroleum Prospecting Licenses and Petroleum Mining Leases at their expiration.
Furthermore, the statement noted that under the new terms, the five OMLs would be converted into four PPLs and 26 PMLs thereby increasing the gas supply in the country.
The statement reads, “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.”
“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. 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 Group CEO of the NNPCL, Mele Kyari described Chevron as a reliable partner that has not decided to divest assets from shallow waters as its fellow IOC counterparts have done in recent years. In the past few years, International Oil Companies (IOCs) have divested assets worth billions of dollars from onshore fields in favour of offshore projects. These include Exxon Mobil, Shell, and ENI.
He praised the NUPRC for its role in the asset conversion, while CNL’s Mrs. Michelle Pflueger reaffirmed the company’s commitment to the assets.
NNPC Ltd.’s Mrs. Oritsemeyiwa Eyesan emphasized the advantages of PIA terms, and Mr. Bala Wunti noted that the conversion is aimed at boosting crude oil production to meet the 165,000 bopd target by the end of 2024.
About the PIA
In July 2021, the two chambers of the National Assembly passed the Petroleum Industry Bill (PIB) into an Act over a decade after its first introduction into the National Assembly.
- Former President Buhari signed the Act into law in August 2021 thereby deregulating the sector.
- The Petroleum Industry Act establishes the legal, governance, regulatory, and fiscal framework for Nigeria’s petroleum industry, including the development of host communities and other related matters.
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