The Minister of State for Petroleum Resources (Oil), Senator Heineken Lokpobiri, has called on Engineering, Procurement, and Construction (EPC) companies to reinvest in Nigeria’s oil and gas sector, emphasising the significant incentives available for deepwater operators under the Petroleum Industry Act (PIA).
Speaking at the EPC Deepwater Investment Roundtable organised by the Oil Producers Trade Section (OPTS), Lokpobiri stressed that Nigeria has transformed its oil investment landscape with bold reforms, investor-friendly policies, and enhanced fiscal benefits.
Lokpobiri highlighted key incentives under the PIA, including reduced royalty rates for deep offshore production, which range from five per cent to 7.5 per cent depending on the water depth. He further noted that cost recovery limits have been removed, allowing companies to recover their development costs before profit sharing begins fully.
This is a vital enhancement designed to improve project viability and attract major investments.
“When we say Nigeria is open for business, we mean it,” Lokpobiri declared. These incentives are part of comprehensive reforms that include streamlined fiscal terms, regulatory clarity, and project security partnerships with the Nigerian Navy and other security agencies. These measures address previous challenges such as contracting inefficiencies and budgetary uncertainty that caused many EPC firms to scale down or exit.”
The minister strongly appealed to International Oil Companies (IOCs) and deepwater operators to proceed with Final Investment Decisions (FIDs), emphasising that the return of EPC firms depends on the flow of projects, which in turn depends on continued investment by operators. “The EPCs will not return if there are no projects, and there can be no projects if operators are not investing,” he stated.
Lokpobiri assured that the incentives extend not only to the IOCs but also to the EPC contractors who execute these complex deepwater projects. “These giant EPC companies, who once left, are exactly the kind of players who can thrive in deepwater. We will ensure that the benefits under the PIA are extended to EPCs because, without them, these projects cannot be delivered,” he affirmed.
He also encouraged EPC firms to view Nigeria’s deepwater basin as a massive and attractive space of opportunity, highlighting the government’s deliberate efforts to remove barriers, incentivise performance, and build lasting partnerships. The roundtable concluded with a strong commitment between the government, EPC contractors, and deepwater operators to reinvigorate the project pipeline, enhance local content, and ensure mutual prosperity for all stakeholders.
Lokpobiri’s message marks a decisive move to reposition Nigeria as a competitive, secure, and rewarding destination for deepwater oil investments, with incentives designed to foster growth and sustainability in the sector. This new landscape under the PIA promises to unlock Nigeria’s deepwater potential with reduced royalties and enhanced cost recovery as central pillars.
