President Bola Ahmed Tinubu has signed a new Executive Order aimed at lowering project costs, attracting investment, and increasing revenue in Nigeria’s oil and gas sector.
The Executive Order, titled Upstream Petroleum Operations Cost Efficiency Incentives Order, 2025, was announced by the Special Adviser to the President on Energy, Olu Verheijen. It introduces performance-based incentives to encourage cost-effective and competitive operations across the upstream segment of the oil industry.
According to the statement, the Order is a strategic shift from policy intent to performance execution, building on the Administration’s 2024 reforms, including improved fiscal terms, faster contracting cycles, and globally aligned local content rules.
Quoting President Tinubu, the statement read:
“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.”
Key Provisions of the Order Include:
- Performance-Based Tax Incentives: Operators who achieve standard cost savings will receive specific tax reliefs.
- Terrain-Specific Cost Benchmarks: The Nigerian Upstream Petroleum Regulatory Commission (NUPRC) will set annual cost benchmarks for onshore, shallow water, and deep offshore operations.
- Fiscal Discipline Through Credit Caps: Tax credits are capped at 20% of an operator’s annual tax liability to safeguard public revenues.
Speaking on the Executive Order, Verheijen said:
“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.”
President Tinubu has directed Verheijen to coordinate inter-agency efforts to ensure smooth and effective implementation of the Order across all relevant institutions.