President Bola Ahmed Tinubu has signed a new Executive Order introducing performance-based incentives aimed at reducing the cost of oil and gas operations, attracting fresh investment, and enhancing government revenue from Nigeria’s upstream petroleum sector.
This was announced on Thursday by the Special Adviser to the President on Energy, Olu Verheijen on Thursday.
The Upstream Petroleum Operations Cost Efficiency Incentives Order (2025) introduces performance-based tax incentives for upstream operators that achieve verifiable cost savings aligned with defined industry benchmarks. These benchmarks—based on terrain types such as onshore, shallow water, and deep offshore—will be published annually by the Nigerian Upstream Petroleum Regulatory Commission (NUPRC).
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Implementation guidelines for the Order will be issued shortly. Among its key provisions, the Order caps tax credits at 20% of a company’s annual tax liability. This ensures strong fiscal incentives for efficient operators while safeguarding government revenues.
“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 Tinubu was quoted as saying.
“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 added. “With this reform, we are rewarding efficiency, strengthening investor confidence, and ultimately delivering greater value to the Nigerian people.”
The Executive Order builds upon Tinubu’s 2024 energy sector reforms, which introduced improved fiscal terms for investors, shortened project timelines, and streamlined local content requirements in line with global standards.
In a speech to mark his second year anniversary in office, President Tinubu restated his commitment to attracting investment to the oil and gas sector.
“The oil and gas sector is recovering; rig counts are up by over 400% in 2025 compared to 2021, and over $8 billion in new investments have been committed,” he said.
his latest Executive Order builds on the administration’s 2024 reform directives, which enhanced fiscal terms, shortened project timelines, and aligned local content requirements with global best practices.
Notably, on February 28, 2024, President Tinubu signed three Executive Orders reaffirming the Federal Government’s commitment to improving Nigeria’s investment climate and positioning the country as Africa’s preferred petroleum sector destination. These Orders include:
1. Oil and Gas Companies (Tax Incentives, Exemption, Remission, etc.) Order, 2024
2. Presidential Directive on Local Content Compliance Requirements, 2024
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3. Presidential Directive on Reduction of Petroleum Sector Contracting Costs and Timelines, 2024
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