By President Tinubu Signs Executive Order
Seeks to Boost Oil Sector Efficiency and Investment
Summary
- New tax incentives for upstream oil operators who achieve cost savings within set benchmarks.
- Government caps tax credits at 20% of annual liability to protect revenue while promoting efficiency.
- President Tinubu declares the directive a strategy to boost investment and national value.
Abuja, Nigeria – President Bola Ahmed Tinubu has signed a groundbreaking Executive Order aimed at driving cost efficiency, attracting investment, and boosting revenues in Nigeria’s oil and gas sector.
The Upstream Petroleum Operations Cost Efficiency Incentives Order (2025) introduces performance-based tax incentives for companies that meet verifiable cost-saving benchmarks, which will be published annually by the Nigerian Upstream Petroleum Regulatory Commission (NUPRC). These benchmarks will vary based on terrain—onshore, shallow water, and deep offshore.
To maintain fiscal responsibility, the Order caps tax credits at 20% of an operator’s annual tax liability, striking a balance between incentivizing efficiency and protecting government revenues.
“Nigeria must attract investment inflows, not out of charity, but because investors are convinced of real and enduring value,” President Tinubu stated. “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.”
Special Adviser to the President on Energy, Mrs. Olu Verheijen, emphasized the strategic nature of the move: “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.”
She added, “With this reform, we are rewarding efficiency, strengthening investor confidence, and ultimately delivering greater value to the Nigerian people.”
To ensure smooth execution, President Tinubu has directed Mrs. Verheijen to coordinate inter-agency efforts, ensuring alignment across government bodies and converting policy into measurable impact.
This directive builds on the administration’s 2024 reforms, which enhanced fiscal terms, reduced project timelines, and improved alignment of local content policies with international standards.
