The Nigerian National Petroleum Company Limited (NNPC) and Chevron Nigeria Ltd. have successfully completed the conversion of five joint venture assets, in accordance with the Petroleum Industry Act (PIA) of 2021. This move is expected to significantly boost crude oil production, with both companies aiming for a target of 165,000 barrels per day by the end of 2024.
Bala Wunti, Chief Upstream Investment Officer at NNPC Ltd., emphasized that Chevron’s operational strategy plays a vital role in ensuring a stable gas supply to the domestic market, while maintaining network stability. The conversion marks a shift from the previous Petroleum Profit Tax regime to the investor-friendly PIA terms.
According to NNPC Ltd.’s Chief Corporate Communications Officer, Olufemi Soneye, the companies formalized the asset conversion during a ceremony at NNPC Towers. The agreement transitions five Oil Mining Leases (OMLs) into four Petroleum Prospecting Licenses (PPLs) and 26 Petroleum Mining Leases (PMLs). This is a key step in boosting domestic gas supply and strengthening Nigeria’s position in the global oil and gas market.
The PIA stipulates that all existing Oil Prospecting Licenses and OMLs will automatically transition to PPLs and PMLs upon expiration, although companies can choose to voluntarily convert under the PIA framework. NNPC’s Group CEO, Mele Kyari, commended Chevron for its continued commitment to the Nigerian market, noting, “Chevron has been a partner of choice and has not considered completely divesting from shallow water operations.”
Kyari reassured Chevron that NNPC is committed to fostering their partnership to create mutual value, strengthening Nigeria’s presence in both the domestic and export-gas markets. Chevron’s Director of Deepwater and Production Sharing Contracts, Michelle Pflueger, echoed the importance of the asset conversion, reaffirming Chevron’s long-term commitment to the joint venture.
Additionally, NNPC Executive Vice President of Upstream, Oritsemeyiwa Eyesan, highlighted the strategic benefits of the PIA terms, stating that the conversion is key to fully realizing the objectives of the Act. The Nigerian Upstream Petroleum Regulatory Commission was also praised for its critical role in facilitating the conversion process.
This conversion is a major milestone for Nigeria’s oil and gas industry, as both NNPC and Chevron look to increase oil production and expand their impact in the global market.
