NNPC and Chevron Complete Landmark Asset Conversion Under Petroleum Industry Act

The Nigerian National Petroleum Company Limited (NNPC) and its joint venture partner, Chevron Nigeria Ltd, have successfully converted five of their joint venture assets, marking a significant milestone in compliance with the Petroleum Industry Act (PIA) of 2021. This crucial step is expected to drive a substantial increase in crude oil production, with the two companies setting an ambitious target of 165,000 barrels per day by the end of 2024.

Bala Wunti, Chief Upstream Investment Officer at NNPC, underscored the strategic importance of the asset conversion, noting that it would not only enhance oil output but also ensure a stable supply of gas to the domestic market. He praised Chevron’s operational expertise, which he said had been essential in maintaining network stability and supporting Nigeria’s gas sector.

The conversion, which transitions the assets from the old Petroleum Profit Tax system to the more investor-friendly terms under the PIA, involves the transformation of five Oil Mining Leases (OMLs) into four Petroleum Prospecting Licences(PPLs) and 26 Petroleum Mining Leases (PMLs). The move is seen as a critical step in boosting Nigeria’s domestic gas supply and strengthening its position in the global energy market.

In a statement issued by NNPC’s Chief Corporate Communications Officer, Olufemi Soneye, the company confirmed that the signing of the necessary agreements between NNPC and Chevron took place on Monday.

Group CEO of NNPC, Mele Kyari, hailed Chevron as a steadfast partner, acknowledging its commitment to Nigeria’s energy landscape. “Chevron has remained a partner of choice, consistently supporting Nigeria’s upstream operations without contemplating divestment, and we are proud of this long-standing relationship,” Kyari said.

Kyari also reassured Chevron of NNPC’s dedication to maintaining the partnership, with a focus on creating shared value and bolstering Nigeria’s role in both domestic and export markets for gas.

Chevron’s Director of Deepwater and Production Sharing Contracts, Mrs. Michelle Pflueger, echoed Kyari’s sentiments, emphasizing the importance of the conversion for both companies. She reaffirmed Chevron’s continued commitment to its joint venture assets in Nigeria, noting the benefits of the transition under the PIA.

NNPC Executive Vice President of Upstream, Mrs. Oritsemeyiwa Eyesan, highlighted the strategic advantages brought by the PIA terms. She stressed that the conversion is key to unlocking the full potential of Nigeria’s oil and gas sector and driving the successful implementation of the Petroleum Industry Act.

The statement also commended the Nigerian Upstream Petroleum Regulatory Commission (NUPRC) for its instrumental role in facilitating the asset conversion process. The collaboration between NNPC, Chevron, and the regulatory body signals a positive step towards the broader goals of the PIA, aimed at improving transparency and attracting further investment into Nigeria’s oil and gas sector.