A significant step towards increasing Nigeria’s oil production has been taken, as the Nigerian National Petroleum Company Limited (NNPC) and Chevron Nigeria Ltd have successfully converted five joint venture assets to the terms of the Petroleum Industry Act (PIA) of 2021.
According to a statement released by NNPC’s Chief Corporate Communications Officer, Olufemi Soneye, the conversion process involved transforming five Oil Mining Leases (OMLs) into four Petroleum Prospecting Licenses (PPLs) and 26 Petroleum Mining Leases (PMLs). This transition marks a crucial step towards increasing domestic gas supply and expanding Nigeria’s footprint in the global market.
The Chief Upstream Investment Officer at NNPC, Mr. Bala Wunti, expressed optimism about the impact of the asset conversion on crude oil production. He stated that the two companies are targeting a combined daily production of 165,000 barrels of oil by the end of 2024. Wunti emphasized the importance of Chevron’s operational approach in maintaining network stability and ensuring a reliable supply of gas to the domestic market.
The PIA mandates that all existing Oil Prospecting Licenses (OPLs) and OMLs must automatically transition into PPLs and PMLs upon expiration. However, companies also have the option to voluntarily convert under the PIA terms. The conversion of the five joint venture assets by NNPC and Chevron is a testament to the companies’ commitment to the new regulatory framework and their desire to capitalize on the opportunities it presents.
NNPC’s Group CEO, Mele Kyari, commended Chevron for its long-standing partnership and unwavering commitment to Nigeria’s oil and gas industry. “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, echoed Kyari’s sentiments, highlighting the importance of the asset conversion for both companies. She reaffirmed Chevron’s long-standing commitment to the joint venture assets and expressed confidence in the future of the partnership.
NNPC Executive Vice President, Upstream, Mrs. Oritsemeyiwa Eyesan, emphasized the strategic advantages of the PIA terms, stating that the conversion is crucial to the successful implementation of the Act. She highlighted the Act’s provisions for enhanced fiscal terms, improved governance, and increased local content participation, which are expected to attract more investment and stimulate economic growth.
The statement also commended the Nigerian Upstream Petroleum Regulatory Commission (NUPRC) for its pivotal role in facilitating the conversion process. The NUPRC’s guidance and support were instrumental in ensuring a smooth transition and minimizing disruptions to operations.
The completion of the asset conversion by NNPC and Chevron is a significant milestone for Nigeria’s oil and gas industry. It demonstrates the government’s commitment to reforming the sector and attracting investment. By increasing crude oil production and expanding domestic gas supply, the conversion is expected to contribute to Nigeria’s economic development and energy security.
