The Nigerian National Petroleum Company (NNPC) Limited has announced the signing of an agreement with Chevron Nigeria Ltd (CNL), its joint venture (JV) partner, on the conversion of five oil mining lease (OMLs) into four petroleum prospecting licence (PPLs) and 26 petroleum mining lease (PMLs).

This is even as the conversion is expected to significantly bolster crude oil production — with the two partners focusing on attaining 165,000 barrels per day (bpd) crude oil production target by December 2024

According to a statement by Femi Soneye, Chief Corporate Communications Officer, NNPC Ltd, he disclosed that the signing ceremony was held on Monday at the NNPC Towers, Abuja.

He added that the signing was in line with the provisions of the Petroleum Industry Act (PIA) but did not specify the converted assets.

“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”.

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“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,” the oil firm said.

“During the ceremony, the two partners signed documents on the conversion of five (5) OMLs into four (4) PPLs and twenty-six (26) PMLs, in line with the new PIA terms, marking a significant step towards increasing domestic gas supply and expanding global market presence.”

In his remarks, Bala Wunti, NNPC’s chief upstream investment officer, said the assets’ conversion is expected to significantly bolster crude oil production — with the two partners focusing on attaining 165,000 barrels per day (bpd) crude oil production target by year-end.

By: Babajide Okeowo

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