KEY POINTS
- NNPC and Chevron’s JV targets 165,000 barrels of oil per day by 2024.
- The asset conversion aligns with the Petroleum Industry Act (PIA) terms.
- This partnership strengthens Nigeria’s position in the global oil and gas markets.
The Nigerian NNPC Limited, and its Joint Venture partner, Chevron Nigeria Ltd (CNL) envision of attaining petroleum production of around 165000 BPD by the end of next year 2024.
This was greatly supported when the two partners agreed on converting five JV assets in line with PIA.
The announcement was made by the Chief Corporate Communications Officer of the NNPC, Olufemi Soneye. The agreement aims to increase the local supply of gas and the market position of the nation in the global oil market.
This is in line with the PIA 2021 to convert all the Oil Prospecting Licenses (OPLs) and Oil Mining Leases (OMLs) into Petroleum Prospecting Licenses (PPLs) and Petroleum Mining Leases (PMLs) respectively upon expiration.
A great shift under PIA terms
The PIA term is generally believed to be more friendly to investors than the former Petroleum Profit Tax (PPT) system. The conversion of the five OMLs into four PPLs and 26 PMLs will lead to greater efficiency and the generation of more value for the JV partners.
The Group CEO of NNPC, Mele Kyari agreed with the sentiment stating that Chevron has been a good partner who has continued to do business in Nigeria’s upstream sector for many years.
Driving growth in oil and gas markets
As reported in Vanguard, Oritsemeyiwa Eyesan, the Executive Vice President, of NNPC Upstream, noted that the proposed asset conversion of the PIA is critical in enhancing production and spurring the operation of the PIA.
Michelle Pflueger, the Director of Chevron’s Deepwater and Production Sharing Contract held a similar sentiment at the signing agreement and said that the signing of the deal is a pointer to Chevron’s commitment to the JV asset and the Nigerian oil and gas sector.
The Nigerian Upstream Petroleum Regulatory Commission (NUPRC) was also hailed for its significant role in making the conversion possible.
As partners seek to realize this goal before the end of 2024, the new partnership is believed to expand Nigeria’s stake in the domestic and global oil market..
