President Bola Tinubu has signed a new Executive Order aimed at cutting project costs, boosting investment, and increasing government revenue from Nigeria’s oil and gas industry.

Known as the Upstream Petroleum Operations Cost Efficiency Incentives Order (2025), the directive introduces performance-based tax incentives for upstream operators that achieve verifiable cost reductions aligned with specific industry benchmarks. This was revealed in a statement by Senan Murray, spokesperson for the Special Adviser to the President on Energy.

According to the statement, the Nigerian Upstream Petroleum Regulatory Commission (NUPRC) will release these cost benchmarks annually, categorized by terrain—onshore, shallow water, and deep offshore.

The Order will be accompanied by detailed implementation guidelines, which will be issued at a later date.

One of the key elements of the Order includes returning 50% of any incremental government revenue from verified cost savings to the investors. Additionally, tax credits will be capped at 20% of a company’s annual tax liability—balancing incentives with the need to safeguard government income.

"This is not charity—we seek investment because the opportunities here offer genuine, lasting value. This Executive Order sends a clear message: Nigeria is building a more efficient, competitive, and inclusive oil and gas industry. Our goal is to secure the nation’s future, generate employment, and maximize returns from every barrel," President Tinubu stated.

To ensure smooth execution, the President has assigned his Special Adviser on Energy to oversee inter-agency coordination and align government efforts for measurable impact.

Olu Verheijen, the Special Adviser, emphasized that the initiative is a strategic move to make Nigeria’s upstream sector globally competitive and fiscally robust. “It’s not just about cutting costs—it’s about rewarding efficiency, strengthening investor trust, and ensuring the Nigerian people benefit more from our natural resources,” she said.

The statement also noted that the new Executive Order builds upon the administration’s 2024 reform directives, which improved fiscal terms, accelerated project execution, and brought local content regulations in line with global standards.