President Bola Tinubu has issued a new executive order (EO)
to lower project costs, attract investment, and enhance revenues from oil and
gas operations.
In a statement on Thursday, the office of the special
adviser to the president on energy said the order, tagged the ‘Upstream
Petroleum Operations Cost Efficiency Incentives Order (2025)’, also caps tax
credits to firms at 20 percent.
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.
According to the statement, the EO introduces
performance-based tax incentives for upstream operators who deliver “verifiable
cost savings” aligned with defined industry benchmarks.
“The Nigerian Upstream Petroleum Regulatory Commission (NUPRC)
will publish these benchmarks annually according to terrain onshore, shallow
water, and deep offshore,” the statement reads.
“Additionally, detailed implementation guidelines for the
new Order will be issued in due course. Among other provisions, the Order also
caps available tax credits at 20% of a company’s annual tax
liability—protecting government revenues while still offering strong fiscal
terms to incentivize efficient operators.”
Speaking on the new order, President Bola Tinubu said
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,” he
said.
To ensure effective implementation of the new order, the
president asked Olu Verheijen, his special adviser on energy, to spearhead
inter-agency coordination, ensure alignment across key government institutions
and translate policy objectives into measurable outcomes.
On her part, Verheijen said the order 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 said.
“With this reform, we are rewarding efficiency,
strengthening investor confidence, and ultimately delivering greater value to
the Nigerian people.”
According to the statement, the new order builds on the
administration’s 2024 presidential reform directives, which introduced enhanced
fiscal terms, streamlined project timelines, and aligned local content policies
with global best practices.
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