On May 30, 2025, President Bola Ahmed Tinubu signed the “Upstream Petroleum Operations Cost Efficiency Incentives Order 2025,” aiming to revitalize Nigeria’s oil and gas sector by reducing operational costs and attracting new investments. This executive order introduces performance-based tax incentives for oil and gas companies that achieve verifiable cost savings aligned with annual industry benchmarks set by the Nigerian Upstream Petroleum Regulatory Commission (NUPRC).
Key provisions include:
A 50% return to investors from any incremental government revenue generated through cost savings.
A cap on tax credits at 20% of a company’s annual tax liability.
President Tinubu emphasized that this initiative is part of a broader strategy to make Nigeria’s upstream sector globally competitive and fiscally resilient. The Special Adviser to the President on Energy, Mrs. Olu Verheijen, highlighted that the reform rewards efficiency, strengthens investor confidence, and aims to deliver greater value to the Nigerian people.
This executive order builds upon previous reforms introduced in 2024, which focused on improving fiscal terms, reducing project execution timelines, and harmonizing local content policies with global standards. The coordinated implementation of these policies is expected to enhance Nigeria’s investment attractiveness and stimulate economic grow
