Nigeria’s Oil Production Set to Boost with Successful Conversion of Joint Venture Assets

The Nigerian National Petroleum Company Limited (NNPC) and its joint venture partner, Chevron Nigeria Ltd., have completed the conversion of five joint venture assets in compliance with the Petroleum Industry Act (PIA) of 2021. This milestone is expected to significantly boost crude oil production, with the two companies targeting 165,000 barrels of oil per day by the end of 2024.

According to NNPC’s Chief Upstream Investment Officer, Mr. Bala Wunti, the asset conversion is expected to maintain network stability and ensure a steady supply of gas to the domestic market. The transition follows the shift from the Petroleum Profit Tax regime to the more investor-friendly PIA terms.

The conversion process involved the signing of necessary documents by both partners during a ceremony at NNPC Towers on Monday. The agreement converted five Oil Mining Leases into four Petroleum Prospecting Licenses and twenty-six Petroleum Mining Leases. This conversion represents a key milestone in increasing domestic gas supply and expanding Nigeria’s footprint in the global market.

NNPC’s Group CEO, Mele Kyari, praised Chevron for its long-term partnership, stating, “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.” Kyari 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, affirmed the importance of the conversion for both companies and reiterated Chevron’s long-standing commitment to the JV assets. NNPC’s Executive Vice President, Upstream, Mrs. Oritsemeyiwa Eyesan, highlighted the strategic advantages of the PIA terms, emphasizing that the conversion is crucial to the successful implementation of the Act.

The statement also commended the Nigerian Upstream Petroleum Regulatory Commission for its pivotal role in facilitating the conversion process. The successful conversion of these joint venture assets is expected to have a positive impact on Nigeria’s oil production and the country’s economy as a whole.