Tinubu Signs Executive Order to Cut Oil Sector Costs, Attract Investment
By peterside Rejoice Eneky
President Bola Ahmed Tinubu has signed a new Executive Order aimed at overhauling Nigeria’s oil and gas sector by cutting project costs, boosting investment, and increasing government revenues. The directive, titled the Upstream Petroleum Operations Cost Efficiency Incentives Order, 2025, was announced Thursday in a statement released by Senan Murray, Media Contact in the Office of the Special Adviser to the President on Energy.
The order introduces performance-based tax incentives designed to reward oil and gas companies that demonstrate measurable cost reductions in line with industry benchmarks. These benchmarks will be set and published annually by the Nigerian Upstream Petroleum Regulatory Commission (NUPRC), covering operations across onshore, shallow water, and deep offshore terrains.
President Tinubu described the reform as a strategic step toward building a globally competitive and fiscally resilient oil and gas industry. He emphasized that the initiative was not driven by a desire to cut costs for their own sake but by a broader objective of strengthening investor confidence and securing long-term national value.
“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.”
The new directive also promises to share incremental revenue gains between the government and investors, providing a 50 percent return to investors on any additional revenue generated through cost-saving measures. However, tax credits tied to these savings will be capped at 20 percent of a company’s annual tax liability, in what officials describe as a balanced approach to encourage efficiency without undermining national revenue.
Special Adviser to the President on Energy, Olu Verheijen, explained that the order forms part of a deliberate strategy to revitalize Nigeria’s upstream sector and position it as a global investment destination. She said the reform rewards operational efficiency, enhances transparency, and creates a more predictable fiscal environment for investors.
“With this reform, we are rewarding efficiency, strengthening investor confidence, and ultimately delivering greater value to the Nigerian people,” Verheijen said.
To ensure effective implementation, President Tinubu has directed the Office of the Special Adviser on Energy to lead an inter-agency coordination effort. The goal is to align all relevant institutions with the policy’s objectives and ensure smooth execution at all levels.
The order builds on previous oil and gas sector reforms introduced in 2024, which included improved fiscal terms, reduced project timelines, and efforts to harmonize local content regulations with international best practices. It also forms a core part of Tinubu’s Renewed Hope Agenda, aimed at driving economic transformation through strategic sectoral reforms.
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