President Bola Ahmed Tinubu has signed a new executive order introducing performance-based tax incentives to reduce project costs and boost investment in upstream oil and gas operations, the Special Adviser to the President on Energy Olu Verheijen announced on Thursday.
The Upstream Petroleum Operations Cost Efficiency Incentives Order (2025) establishes a framework to reward operators that achieve verifiable cost savings in line with defined industry benchmarks, which will be set annually by the Nigerian Upstream Petroleum Regulatory Commission across onshore, shallow-water and deep-offshore terrains.
The new regulation caps tax credits at 20% of a company’s annual tax liability, maintaining fiscal balance while incentivising efficiency.
“Nigeria must attract investment inflows, not out of charity, but because investors are convinced of real and enduring 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,” President Bola Ahmed Tinubu said.
To coordinate implementation, the Special Adviser to the President on Energy has been tasked with aligning inter-agency efforts to ensure effective policy execution.
“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,” Verheijen said. “With this reform, we are rewarding efficiency, strengthening investor confidence and ultimately delivering greater value to the Nigerian people.”
The order expands on the 2024 presidential reform directives that improved fiscal terms, shortened project development cycles and aligned local-content policies with international standards.
Source: theenergyyear.com