FRI MAY 30 2025-theGBJournal| President Bola Ahmed Tinubu, has issued a landmark Presidential Order on Cost Efficiency, a bold and pragmatic step to make Nigeria’s upstream sector more globally competitive, fiscally resilient, and investor aligned.
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.
The Federal Governemt said the additionally, detailed implementation guidelines for the new Order will be issued in due course.
Among other provisions, the Order also caps available tax credits at 20% of a company’s annual tax liability—protecting government revenues while still offering strong fiscal terms to incentivize efficient operators.
”Nigeria must attract investment inflows, not out of charity, but because investors are convinced of real and enduring value.
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,” said President Tinubu.
To ensure effective implementation of the new Order, the President has tasked the Special Adviser on Energy to lead inter-agency coordination, ensuring alignment across key government institutions and translating policy intent into measurable outcomes.
”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,” said Mrs. Olu Verheijen, Special Adviser to the President on Energy. “With this reform, we are rewarding efficiency, strengthening investor confidence, and ultimately delivering greater value to the Nigerian people.”
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.
Olu Verheijen, Special Adviser to the President on Energy, explains what the new Executive Oder means for Nigeria at a time when oil prices are softening and capital is more selective.
She said the Upstream Petroleum Operations Cost Efficiency Incentives Order (2025) does three powerful things: it links tax incentives to verifiable cost savings, establishes terrain-specific cost benchmarks (onshore, shallow water, deep offshore and caps credits to protect government revenue while rewarding efficient operators
”Now we are shifting from intent to execution with performance, discipline, and value at the center” Verheijen said.
X-@theGBJournal|Facebook-the Government and Business Journal|email:gbj@govbusinessjournal.com|govandbusinessj@gmail.com
