Tinubu signs Executive Order on fresh incentives for oil sector

President Bola Tinubu has issued a new Executive Order to lower project costs, attract more investors, and enhance revenues from operations in the oil sector.

The document, which was made public by the office of the Special Adviser to the President on Energy, Olu Verheijen, said the move is to further strengthen Nigeria’s global competitiveness and attract greater investment into the sector.

The Upstream Petroleum Operations Cost Efficiency Incentives Order, 2025, introduces a new performance-driven framework that links tax incentives to verifiable cost savings, benchmarks operations by terrain, and protects public revenues while rewarding operational efficiency.

“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,” the statement said, quoting President Tinubu.

Key provisions of the Order include:

• Performance-Based Tax Incentives: Operators who achieve industry-standard cost reductions will qualify for defined tax reliefs.
• Terrain-Specific Benchmarks: The Nigerian Upstream Petroleum Regulatory Commission (NUPRC) will annually publish cost benchmarks for onshore, shallow water, and deep offshore operations.
• Credit Caps for Fiscal Discipline: Tax credits under the Order are capped at 20% of an operator’s annual tax liability, ensuring government revenues remain protected. Building on the Administration’s 2024 reforms—improved fiscal terms, accelerated contracting cycles, and globally aligned local content policies—the 2025 Executive Order moves the sector from reform intent to performance execution.
• Speaking on the development, 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 the Special Adviser on Energy to coordinate inter-agency efforts to ensure alignment and implementation across all relevant institutions.