Tinubu issues major Executive Order in oil & gas sector

In a bid to enhance Nigeria’s global competitiveness and attract increased investment in the oil and gas industry, President Bola Tinubu has signed a landmark Executive Order designed to incentivize cost efficiency in upstream petroleum operations.

The Executive Order, titled Upstream Petroleum Operations Cost Efficiency Incentives Order, 2025, introduces a performance-based framework that links tax reliefs to measurable cost savings. It also establishes operational benchmarks tailored to specific terrains while safeguarding public 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,” said President Tinubu. “It is about securing our future, creating jobs, and making every barrel count.”

According to a statement released by the presidency on Friday, the key elements of the Order include: Performance-Based Tax Incentives: Operators who achieve industry-standard cost reductions will qualify for defined tax reliefs.

Terrain-Specific Benchmarks: The Nigerian Upstream Petroleum Regulatory Commission (NUPRC) will publish annual cost benchmarks for onshore, shallow water, and deep offshore operations.

Credit Caps for Fiscal Discipline: Tax credits will be limited to 20% of an operator’s annual tax liability, preserving government revenue.

The Executive Order builds on the administration’s 2024 reforms, which included improved fiscal terms, faster contracting processes, and internationally aligned local content policies. With this latest directive, the government aims to transition from policy reform to tangible performance outcomes in the sector.

“This is not a pursuit of cost reduction for its own sake,” said Mrs. Olu Verheijen, Special Adviser to the President on Energy. “It is a deliberate strategy to position Nigeria’s upstream sector as globally competitive and fiscally resilient. With this reform, we are rewarding efficiency, strengthening investor confidence, and ultimately delivering greater value to the Nigerian people.”

President Tinubu has directed the Special Adviser on Energy to coordinate inter-agency collaboration to ensure the effective implementation of the Executive Order across all relevant institutions.