President Bola Ahmed Tinubu has signed a new Executive Order aimed at reducing project costs, attracting fresh investment, and increasing revenue generation within Nigeria’s oil and gas sector.

The order, officially titled the Upstream Petroleum Operations Cost Efficiency Incentives Order, 2025, was announced through a statement issued by Olu Verheijen, the Special Adviser to the President on Energy. According to the release, the initiative is designed to improve Nigeria’s global competitiveness in the upstream petroleum space by incentivizing efficiency while safeguarding government revenues.

“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 quoted President Tinubu as saying.

Key features of the Executive Order include:

Performance-Based Tax Incentives: Operators who demonstrate industry-standard cost savings will be eligible for targeted tax reliefs.
Terrain-Specific Operational Benchmarks: The Nigerian Upstream Petroleum Regulatory Commission (NUPRC) will publish annual cost benchmarks for onshore, shallow water, and deep offshore operations.
Credit Caps to Ensure Fiscal Prudence: Tax credits will be capped at 20% of an operator’s annual tax liability to maintain fiscal discipline and protect public revenues.

The order builds on the administration’s ongoing reforms introduced in 2024, which include improved fiscal terms, streamlined contracting processes, and modernized local content policies. Together, these measures aim to transition the sector from reform planning to tangible performance outcomes.

“This is not about cost-cutting for its own sake,” Verheijen explained. “It is a deliberate strategy to position Nigeria’s upstream oil and gas sector as globally competitive and fiscally resilient. With this reform, we are rewarding operational efficiency, building investor confidence, and delivering more value to the Nigerian people.”

To ensure effective implementation, President Tinubu has mandated Verheijen to coordinate inter-agency efforts and align relevant institutions with the new policy direction.