Tinubu issues Executive Order to reduce cost of oil production, encourage investment
By Kunle Sanni
President Bola 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.
The Special Adviser on Energy, Mrs. Olu Verheijen, disclosed this on Thursday via her X account. She stated that President Tinubu directed her office to oversee and coordinate the implementation of the new policy and lead inter-agency alignment across key regulatory and fiscal bodies.
The Upstream Petroleum Operations Cost Efficiency Incentives Order, 2025, unveiled on Thursday, offers tax incentives to oil companies that achieve verifiable cost savings in line with industry benchmarks. The move is part of Tinubu’s broader strategy to make Nigeria’s energy sector globally competitive and financially sustainable.
Under the Order, the Nigerian Upstream Petroleum Regulatory Commission (NUPRC) will annually set and publish operational cost benchmarks for onshore, shallow water, and deep offshore oil terrains. Companies that operate more efficiently than these benchmarks will be rewarded with tax credits capped at 20% of their annual tax liabilities—encouraging prudent spending while preserving government revenue.
“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 said.
“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.
