President Bola Ahmed Tinubu has signed a new Executive Order aimed at reducing the high cost of oil and gas projects in Nigeria, incentivizing operational efficiency, and boosting government revenue from upstream petroleum activities.
The order, officially titled the “Upstream Petroleum Operations Cost Efficiency Incentives Order (2025),” introduces a series of performance-based fiscal incentives for oil and gas companies operating in Nigeria. It also sets a cap on tax credits that companies can claim, limiting them to 20% of their annual tax liability a move designed to protect public revenues while still encouraging investment.
The Office of the Special Adviser to the President on Energy, Olu Verheijen, announced the order in a statement on Thursday. It stated that the Nigerian Upstream Petroleum Regulatory Commission (NUPRC) will annually publish cost benchmarks based on operational terrains onshore, shallow water, and deep offshore to assess and reward companies that deliver measurable cost savings aligned with these standards.
“This Executive Order is a signal to the world: we are building an oil and gas sector that is efficient, competitive, and works for all Nigerians,” President Tinubu said. “It is about securing our future, creating jobs, and making every barrel count.”
Tinubu emphasized that Nigeria is not seeking investment out of charity but is positioning itself as a viable and value-driven destination for global energy capital.
The order builds on the administration’s 2024 presidential reform directives, which aimed to create a more attractive business environment in the energy sector by enhancing fiscal terms, reducing red tape, and aligning local content policies with global best practices.
To ensure the successful rollout of the new incentives, Tinubu has tasked Verheijen with coordinating efforts across key government agencies and ensuring that the policy’s goals are fully realized.
Verheijen said the reform is not about slashing costs arbitrarily but about making Nigeria’s upstream sector globally competitive and fiscally sustainable.
“With this reform, we are rewarding efficiency, strengthening investor confidence, and ultimately delivering greater value to the Nigerian people,” she said.
The Executive Order represents another step in Tinubu’s broader push to revitalize Nigeria’s oil and gas sector, which has long struggled with high operational costs, regulatory uncertainty, and dwindling investment.
