Tinubu signs new Executive Order to cut oil sector costs, boost investment, revenue

In a significant move to reshape Nigeria’s oil and gas industry, President Bola Ahmed Tinubu has signed a fresh Executive Order designed to reduce operational costs, enhance investor confidence, and grow national revenue from the sector.

The Executive Order, titled Upstream Petroleum Operations Cost Efficiency Incentives Order, 2025, introduces a performance-based framework that rewards oil companies with tax incentives for achieving verifiable cost efficiencies.

The announcement was made on Thursday by Olu Verheijen, Special Adviser to the President on Energy.

According to the order, companies operating in the upstream petroleum sector that meet defined industry cost benchmarks will be eligible for tax credits. These benchmarks, tailored to specific terrains such as onshore, shallow water, and deep offshore, will be updated and published annually by the Nigerian Upstream Petroleum Regulatory Commission (NUPRC).

A key provision of the Order caps tax credits at 20% of a company’s annual tax liability. This ensures that while operators are encouraged to improve efficiency, government revenues remain protected.

“This is not just about cutting costs—it’s a strategy to reposition Nigeria’s upstream sector as globally competitive and fiscally resilient,” said Verheijen. “With this reform, we are rewarding efficiency, strengthening investor confidence, and ultimately delivering greater value to the Nigerian people.”

President Tinubu, in a statement marking his second anniversary in office, emphasized that the new Executive Order reflects his administration’s broader commitment to economic transformation.

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“Nigeria must attract investment inflows, not out of charity, but because investors are convinced of real and enduring value,” Tinubu said.

“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.”

To ensure effective implementation, the President has mandated the Special Adviser on Energy to coordinate inter-agency efforts. This includes aligning key regulatory and fiscal bodies to ensure that the Order’s intent translates into measurable outcomes.

The 2025 Order expands upon a series of reform directives introduced by the Tinubu administration in 2024. These include: Oil and Gas Companies (Tax Incentives, Exemption, Remission, etc.) Order, 2024; Presidential Directive on Local Content Compliance Requirements, 2024; Presidential Directive on Reduction of Petroleum Sector Contracting Costs and Timelines, 2024

These earlier reforms introduced enhanced fiscal terms, reduced project approval timelines, and aligned local content rules with international standards, positioning Nigeria as a more attractive investment destination.

President Tinubu highlighted early signs of success, noting that rig counts have surged by over 400% in 2025 compared to 2021, with over $8 billion in new oil and gas investments committed so far this year.

Implementation guidelines for the 2025 Executive Order are expected to be released soon, providing operators with clarity on how to leverage the new incentives.

With this latest Executive Order, the Federal Government is doubling down on its commitment to transform Nigeria’s petroleum sector into a competitive, transparent, and growth-oriented engine for national development.

By prioritizing efficiency, incentivizing innovation, and protecting public revenues, the Tinubu administration aims to drive sustainable value creation for both investors and the Nigerian people.