President Bola Tinubu has signed a new Executive Order aimed at reducing project costs, boosting investment, and increasing government revenue from Nigeria’s oil and gas sector.
The directive, titled Upstream Petroleum Operations Cost Efficiency Incentives Order, 2025, introduces performance-based tax incentives for upstream operators who achieve verifiable cost savings aligned with defined industry benchmarks.
This was disclosed in a statement by Senan Murray from the Office of the Special Adviser to the President on Energy.
According to the release, the Nigerian Upstream Petroleum Regulatory Commission (NUPRC) will annually publish these benchmarks based on terrain—onshore, shallow water, and deep offshore. Comprehensive implementation guidelines are expected to follow.
Key provisions of the Order include the return of 50% of any incremental government gains from cost savings back to investors, and a cap on available tax credits at 20% of a company’s annual tax liability. This structure is intended to encourage efficiency while safeguarding government revenue.
“Nigeria must attract investment inflows, not out of charity, but because investors are convinced of real and enduring value. This Order is a signal to the world: we are building an oil and gas sector that is efficient, competitive, and works for all Nigerians. It is about securing our future, creating jobs, and making every barrel count,” President Tinubu stated.
To ensure seamless implementation, the President has directed the Special Adviser on Energy, Mrs. Olu Verheijen, to lead inter-agency coordination, ensuring alignment across key government institutions and translating policy intent into measurable outcomes.
“This is not a pursuit of cost reduction for its own sake. It is a deliberate strategy to position Nigeria’s upstream sector as globally competitive and fiscally resilient,” Verheijen said.
“With this reform, we are rewarding efficiency, strengthening investor confidence, and ultimately delivering greater value to the Nigerian people.”
The Executive Order builds on the administration’s 2024 presidential reform directives, which improved fiscal terms, shortened project timelines, and aligned local content requirements with global best practices.
