Chevron eyes 165,000 bopd production target by December 2024 following Nigerian license changes

(WO) – In line with Nigeria’s Petroleum Industry Act (PIA) 2021 provisions of transiting assets from the Petroleum Profit Tax (PPT) into PIA terms, state-owned NNPC and its Joint Venture partner, Chevron Nigeria Ltd (CNL), have concluded the conversion of five of its JV assets into the PIA terms.

R-L: GCEO NNPC Ltd, Mele Kyari; Director, Deepwater and Production Sharing Contract (PSC) of Chevron Nigeria Limited, Michelle Pflueger and Queen Nwaha Torkwasi of Legal Department, Nigerian Upstream Petroleum Regulatory Commission (NUPRC), display signed documents during a ceremony on conversion of the NNPC/CNL JV assets into PIA terms, held at the NNPC Towers in Abuja, on Monday.

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 Petroleum Profit Tax (PPT) regime. The PIA terms are generally perceived as more investor-friendly, compared to the PPTA terms.

Chevron and NNPC signed documents on the conversion of five OMLs into four PPLs and twenty-six PMLs, in line with the new PIA terms, marking a significant step towards increasing domestic gas supply and expanding global market presence.

NNPC Ltd’s Chief Upstream Investment Officer, Bala Wunti, noted that the assets conversion is expected to significantly boost crude oil production, with the two partners focusing on attaining the 165,000 bopd production target by year-end 2024.

Speaking at the occasion, Group CEO NNPC Ltd, Mele Kyari, said, “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 added.

Kyari assured Chevron that NNPC would sustain its partnership to create more value for both parties and expand Nigeria’s footprints in the domestic and export gas markets.

Michelle Pflueger, Director, Deepwater and Production Sharing Contract (PSC) of Chevron, stressed the significance of the conversion for both companies and affirmed the company’s long-standing commitment its Nigerian assets.

NNPC Ltd’s Executive Vice President, Upstream, Mrs. Oritsemeyiwa Eyesan, highlighted the advantages of the PIA terms over the previous PPT terms, noting that the conversion was a strategic move towards the successful implementation of the PIA.