The Nigeria National Petroleum Company Ltd (NNPCL) and Chevron Nigeria Limited, its joint venture partner, have successfully transferred five of their joint venture properties under the provisions of the Petroleum Industry Act (PIA), which was enacted in 2021.
The two partners inked the agreement at a ceremony on Monday at the NNPC towers in Abuja, according to a statement signed by Olufemi Soneye, Chief Corporate Communications Manager of NNPC Ltd.
As a result, the Petroleum Profit Tax (PPT) assets were converted into PIA terms.
The statement states that when current Oil Mining Leases (OMLs) and Oil Prospecting Licenses (OPLs) expire, they will be converted to Petroleum Prospecting Licenses and Petroleum Mining Leases.
The announcement also mentioned that the five OMLs would be changed into four PPLs and 26 PMLs under the revised terms, expanding the nation’s gas supply.
The statement is as follows: “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.”
Mele Kyari, the Group CEO of the NNPCL, characterized Chevron as a dependable partner that has refrained from selling assets in shallow seas, unlike its sister IOC companies which have done so in recent times. International Oil Companies (IOCs) have shifted billions of dollars’ worth of assets from onshore resources to offshore projects in the last few years. Among them are ENI, Shell, and Exxon Mobil.
While Mrs. Michelle Pflueger of CNL reiterated the company’s commitment to the assets, he commended the NUPRC for its part in the asset conversion.
The benefits of PIA terms were highlighted by Mrs. Oritsemeyiwa Eyesan of NNPC Ltd., and Mr. Bala Wunti mentioned that the conversion is intended to increase crude oil output to reach the 165,000 bopd target by the end of 2024.
What To Know About The PIA
More than ten years after the Petroleum Industry Bill (PIB) was first introduced in the National Assembly, it was finally enacted into law by both chambers in July 2021.
In August 2021, the Act was signed into law by former President Buhari, deregulating the industry.
Nigeria’s petroleum business, including the development of host communities and other associated matters, has a legal, governance, regulatory, and fiscal framework established under the Petroleum Business Act.
