Tinubu Signs Executive Order to Slash Oil Sector Costs

President Bola Ahmed Tinubu has signed a landmark Executive Order aimed at transforming Nigeria’s oil and gas sector by reducing project costs, attracting fresh investments, and increasing government revenues from upstream petroleum operations.

The Upstream Petroleum Operations Cost Efficiency Incentives Order (2025), announced on Thursday by Senan Murray, Media Contact in the Office of the Special Adviser to the President on Energy, introduces performance-based tax incentives designed to reward oil and gas companies for achieving verifiable cost savings in line with annual industry benchmarks.

Under the new order, the Nigerian Upstream Petroleum Regulatory Commission (NUPRC) will set and publish yearly benchmarks for operational cost efficiency across onshore, shallow water, and deep offshore operations. Detailed guidelines for implementing the order are expected to be released soon.

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

Key provisions include returning 50% of any incremental government revenue gained through cost savings to investors, with a cap on tax credits at 20% of a company’s annual tax liability. This balanced approach is designed to encourage operational efficiency while safeguarding national revenues.

Mrs. Olu Verheijen, Special Adviser to the President on Energy, emphasized, “This is not a pursuit of cost reduction for its own sake. 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 lead an inter-agency task force to coordinate the policy’s rollout, ensuring all relevant institutions align and the order’s objectives are achieved.

This 2025 Executive Order builds on Tinubu’s earlier 2024 reforms that improved fiscal terms, shortened project timelines, and harmonized local content policies with global standards.