President Bola Ahmed Tinubu has signed a landmark executive order aimed at reducing upstream petroleum costs and boosting Nigeria’s oil and gas revenues. The Upstream Petroleum Operations Cost Efficiency Incentives Order (2025) introduces performance-based tax incentives to reward companies that achieve verifiable cost savings, with the goal of attracting new investment and ramping up production.
According to the African Energy Chamber (AEC), the new order demonstrates Nigeria’s commitment to becoming a more attractive investment destination for global oil and gas players. “This recent executive order is a testament to Nigeria’s commitment to strengthening its regulatory landscape, improving fiscals and supporting revenue generation across the oil and gas industry,” said NJ Ayuk, Executive Chairman of the AEC.
The order sets annual performance benchmarks—categorized by asset types such as onshore, shallow-water, and deep-water—that will be published by the Nigerian Upstream Petroleum Regulatory Commission. Companies meeting these benchmarks can claim tax credits of up to 20% of their annual tax liability.
Special Adviser to the President on Energy, Olu Verheijen, will lead inter-agency coordination to ensure that oil operators can fully leverage the incentives.
The move comes at a critical time, with Nigeria targeting oil production of 2 million barrels per day (bpd) and 12 billion standard cubic feet per day (bscf/d) of gas, up from the current 7.3 bscf/d.
“With this reform, Nigeria is well-positioned to attract fresh investment across its upstream oil and gas sector – reaffirming the country’s position as one of Africa’s top producers,” the AEC noted.
The executive order builds on momentum from the Petroleum Industry Act (PIA) of 2021, which aimed to resolve long-standing regulatory uncertainties. Together, the policies are expected to unlock $30 billion in oil and $5 billion in gas investments by 2029.
Recent investments reflect growing confidence: Renaissance Africa Energy plans $15 billion across 32 projects; ExxonMobil is investing $1.5 billion in the Usan deepwater oilfield (OML 138); and a $550 million non-associated gas project by TotalEnergies and NNPC is underway.
With these measures, Nigeria hopes to reverse years of dwindling oil and gas investment and reassert itself as a dominant force in Africa’s energy landscape.
