President Bola Tinubu has signed a new Executive Order aimed at reducing costs, increasing investment, and boosting revenue returns in Nigeria’s oil and gas sector.
This decision is described as a bold move to drive efficiency and revive investor confidence.
The directive, titled Upstream Petroleum Operations Cost Efficiency Incentives Order, 2025, establishes a framework of performance-based tax incentives.
These incentives will reward operators who achieve measurable cost savings in their oil and gas projects.
Companies that meet or surpass industry cost-efficiency benchmarks, which will be set annually by the Nigerian Upstream Petroleum Regulatory Commission (NUPRC) and vary by terrain (onshore, shallow water, and deep offshore), will qualify for significant fiscal rewards.
Crucially, the new system allows eligible companies to retain 50 percent of the additional government revenue generated from their cost savings.
To protect public revenue, however, available tax credits will be limited to 20 percent of a company’s annual tax liability.
“This is not about charity, it’s about value,” President Tinubu stated. “Nigeria must attract investment based on a credible promise of returns. This Order signals to the world that our oil and gas sector is being reformed to become efficient, competitive, and beneficial to all Nigerians. Every barrel must count, for jobs, growth, and our national future.”
To ensure smooth and effective implementation, the President has assigned his Special Adviser on Energy, Mrs. Olu Verheijen, to oversee inter-agency coordination and foster alignment across key government institutions.
Verheijen emphasized, “This reform is not just about slashing costs. It’s a strategic effort to make Nigeria’s upstream sector globally competitive and fiscally resilient. By incentivizing efficiency, we are boosting investor confidence and ensuring greater value for the Nigerian people.”
Senan Murray, from the Office of the Special Adviser to the President on Energy, explained in a statement on Friday that this new Executive Order builds upon previous reforms introduced in 2024, which focused on enhancing fiscal terms, streamlining project timelines, and aligning local content requirements with international standards.
Join Informant Online WhatsApp Channel With Link Below: https://whatsapp.com/channel/0029VaihFajBadmT29ufud2
