Tinubu Signs Executive Order To Cut Oil Project Costs, Boost Revenue

President Bola Tinubu has signed a new Executive Order aimed at reducing the cost of upstream oil and gas projects in Nigeria, a measure designed to attract fresh investment and improve government revenues.

Titled the ‘Upstream Petroleum Operations Cost Efficiency Incentives Order, 2025,’ the directive introduces performance-based tax incentives for oil and gas companies that achieve verifiable cost savings within defined industry benchmarks.

Under the new regime, operators that meet or exceed cost-efficiency targets set annually by the Nigerian Upstream Petroleum Regulatory Commission (NUPRC) will be eligible to receive up to 50% of the government’s incremental revenue gains from those savings.

However, tax credits under the incentive are capped at 20% of a company’s annual tax liability, ensuring a balance between investor reward and government fiscal prudence.

“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,” President Tinubu said in a statement. “It is about securing our future, creating jobs, and making every barrel count.”

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The Order forms part of the Tinubu administration’s broader reforms to reposition Nigeria as a destination of choice for energy investments.

It builds on earlier 2024 directives that improved fiscal terms, accelerated project approvals, and aligned local content policies with international best practices.

Special Adviser to the President on Energy, Mrs. Olu Verheijen, said the directive was not just about reducing costs, but about enhancing competitiveness.

“This is not a pursuit of cost reduction for its own sake,” she said. “We are rewarding efficiency, strengthening investor confidence, and ultimately delivering greater value to the Nigerian people.”

The NUPRC is expected to publish annual cost benchmarks for different operational terrains—onshore, shallow water, and deep offshore, to guide implementation.

Detailed guidelines for the new Order will also be issued in the coming weeks.

Inter-agency coordination to implement the Executive Order will be led by the Special Adviser on Energy, ensuring that the new policy delivers measurable results across the sector.