President Bola Tinubu has signed a new executive order aimed at cutting project costs in Nigeria’s oil and gas sector, attracting critical investment, and enhancing government revenues from upstream operations.
The executive order, named the ‘Upstream Petroleum Operations Cost Efficiency Incentives Order (2025)’, was announced on Thursday by the Office of the Special Adviser to the President on Energy. The order introduces performance-based tax incentives for upstream oil operators that demonstrate “verifiable cost savings” aligned with annual benchmarks to be published by the Nigerian Upstream Petroleum Regulatory Commission (NUPRC).
“The Nigerian Upstream Petroleum Regulatory Commission (NUPRC) will publish these benchmarks annually according to terrain onshore, shallow water, and deep offshore,” the statement reads.
The order also places a ceiling on available tax credits, limiting them to 20% of a company’s annual tax liability. This, according to the presidency, is meant to protect government revenues while still providing attractive fiscal terms for efficient companies.
“As a form of government incentive, a tax credit is the amount of money a company can subtract from the income tax it owes to the state,” the statement explained.
Speaking on the significance of the order, President Tinubu said Nigeria must become a magnet for global investment — not based on sentiment, but on demonstrated economic 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,” he said.
To ensure seamless implementation, the president appointed his Special Adviser on Energy, Olu Verheijen, to coordinate inter-agency collaboration and align key institutions to translate the policy into measurable outcomes.
Verheijen emphasised that the order is not simply about trimming costs but driving structural reform within Nigeria’s upstream oil sector.
“It is a deliberate strategy to position Nigeria’s upstream sector as globally competitive and fiscally resilient,” she said.
“With this reform, we are rewarding efficiency, strengthening investor confidence, and ultimately delivering greater value to the Nigerian people.”
The latest order builds on the Tinubu administration’s broader reform drive in the oil sector.
In 2024, presidential directives introduced enhanced fiscal terms, streamlined project timelines, and revised local content policies to align with international standards.
The executive order represents a key move in Tinubu’s ongoing efforts to reposition Nigeria’s oil and gas sector as a catalyst for sustainable growth and national prosperity.
Chioma Kalu
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