In a bold move to boost the nation’s oil and gas sector, President Bola Ahmed Tinubu has announced the Upstream Petroleum Operations Cost Efficiency Incentives Order (2025). This new Executive Order aims to lower project costs, attract investment, and enhance government revenues from oil and gas operations.

The innovative directive introduces performance-based tax incentives for upstream operators who achieve verifiable cost savings that align with defined industry benchmarks. These benchmarks will be adjusted annually by the Nigerian Upstream Petroleum Regulatory Commission (NUPRC) based on operational terrain—onshore, shallow water, and deep offshore. Detailed implementation guidelines for the new order are expected to be published in the near future.

Investors will benefit from the reform, as it guarantees them a return of 50% on incremental government gains that result from their cost-saving efforts. Moreover, the Order caps available tax credits at 20% of a company’s annual tax liability, which ensures that while government revenues are protected, strong incentives remain for efficient operators.

“This initiative signals to the world that Nigeria is committed to creating a competitive and efficient oil and gas sector,” President Tinubu stated. “We are not seeking investment out of charity but by demonstrating real and enduring value. Our focus is on securing the nation’s future, creating jobs, and maximizing the value of every barrel produced.”

To facilitate the effective implementation of the Executive Order, President Tinubu has assigned the Special Adviser on Energy, Mrs. Olu Verheijen, to lead inter-agency coordination. This effort will ensure alignment among key government institutions to translate policy intent into tangible results.

“This is not merely about cutting costs; it is a strategic initiative to position Nigeria’s upstream sector as globally competitive and fiscally resilient,” said Mrs. Verheijen. “With this reform, we are rewarding efficiency and strengthening investor confidence, aiming to deliver greater value to the Nigerian populace.”

The new Executive Order builds on the administration’s previous reform directives from 2024, which saw improvements in fiscal terms, shortened project timelines, and alignment of local content policies with global best practices.

For more details, the gazetted Executive Order can be accessed at [https://www.energyreforms.ng/](https://www.energyreforms.ng/).