Nigerian President Bola Tinubu has issued an executive order linking oil sector tax incentives directly to cost-cutting measures in a bid to boost investment and competitiveness.
The Upstream Petroleum Operations Cost Efficiency Incentives Order 2025 offers tax credits capped at 20% of annual tax liability for operators who achieve verified cost reductions in onshore, shallow water, and deep offshore projects.
“This is a signal to the world that we’re building an efficient and competitive oil sector,” Tinubu said in a statement. “It’s about creating jobs and making every barrel count.”
Analysts say the order’s success hinges on inter-agency cooperation. “If government agencies align, this could be significant for Nigeria’s investment environment,” said Clementine Wallop of Horizon Engage.
The move follows previous incentives, including a 25% gas utilisation investment allowance last year and streamlined contracting processes. These steps have yet to unlock major new projects but have encouraged some producers to return to existing fields.
