May 30, (THEWILL) – President Bola Tinubu has issued a new Executive Order aimed at reducing project costs, attracting fresh investment, and boosting revenues from Nigeria’s oil and gas operations.
Titled “Upstream Petroleum Operations Cost Efficiency Incentives Order, 2025”, the directive introduces a performance-based framework that links tax incentives to verifiable cost savings, sets operational benchmarks by terrain, and safeguards public revenues while rewarding efficiency.
Designed to enhance Nigeria’s global competitiveness and stimulate greater investment in the sector, President Tinubu said, “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.”
The Order provides for performance-based tax incentives, allowing operators who achieve industry-standard cost reductions to qualify for defined tax reliefs.
It also mandates the Nigerian Upstream Petroleum Regulatory Commission (NUPRC) to publish annual cost benchmarks for onshore, shallow water, and deep offshore operations.
To maintain fiscal discipline, tax credits under the Order are capped at 20 percent of an operator’s annual tax liability, ensuring that government revenues remain protected.
To ensure effective implementation, President Tinubu has directed his Special Adviser on Energy, Mrs. Olu Verheijen, to lead inter-agency coordination, align key government institutions, and translate the policy 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. With this reform, we are rewarding efficiency, strengthening investor confidence, and ultimately delivering greater value to the Nigerian people,” Verheijen said.
The new Executive Order builds on the administration’s 2024 reform directives, which introduced improved fiscal terms, shortened project timelines, and aligned local content policies with international best practices.
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