The President signed an incentives program to encourage cost efficiency in upstream petroleum operations, which includes a tax credit of up to 20% of an operator’s annual tax liability.
Nigeria’s Ministry of Information and National Orientation announced that President Bola Ahmed Tinubu has signed an executive order, “Upstream Petroleum Operations Cost Efficiency Incentives Order (2025)” on 29 May 2025.
The Upstream Petroleum Operations Cost Efficiency Incentives Order (2025) introduces performance-based tax incentives for upstream operators who deliver verifiable cost savings that meet defined industry benchmarks.
The Nigerian Upstream Petroleum Regulatory Commission (NUPRC) will publish these benchmarks annually according to terrain: onshore, shallow water, and deep offshore. Additionally, detailed implementation guidelines for the new Order will be issued in due course.
Among other provisions, the Order returns to investors 50% of incremental government gain resulting from cost savings and caps available tax credits at 20% of a company’s annual tax liability—protecting government revenues while still offering strong fiscal terms to incentivise efficient operators.
The new Order builds on the administration’s 2024 presidential reform directives, which delivered improved fiscal terms, shortened project timelines, and aligned local content policies with global best practice.
The Order takes effect on 30 April 2025, with incentives ending on 31 May 2035 unless extended or modified.
