Tinubu signed an executive order to cut the cost of the oil sector, increase investor confidence

In a brave step to rejuvenate the Nigerian oil and gas industry, Bola President Ahmed Tinubu has signed a new executive order aimed at reducing production costs and offering performance -based tax incentives to submit operators.

This initiative, announced on Saturday by the President’s Special Advisor on Energy, Olu Verheijen, explained the administrative sustainable effort to position the sector for sustainable investment and global competitiveness.

Executive orders, entitled Upstream Petroleum Operation, Operation, Orders Efficiency Efficiency (2025), introduced a framework to give awards to the initiative of cost savings by oil companies, while protecting national income.

Under the new policy, 50 percent of the additional increases of the government from cost savings will be returned to the operator.

In addition, tax credit related to operational efficiency will now be limited to 20 percent of the company’s annual tax obligations. The Nigerian Hulu Oil Regulation Commission (NUPRC) will issue annual benchmarks by Medan, Land, Shallow Water, and deep coast, to guide the incentive process.

“This is a deliberate strategy to position the upstream Nigerian sector as a global and fiscal competitive manner,” Verheijen said, noting that the policy was not only about cutting costs but about an efficient performance appreciation and restoring investor confidence.

This development followed $ 8 billion reported in a new investment into the oil and gas project in Nigeria over the past year, the turnaround caused by new reforms was under the leadership of President Tinubu. Important projects such as Shell’s Bonga North and Towenergy ‘Ubeta have moved forward after the final investment decision, new investor optimism signals.

Nigeria has long wrestled with some of the highest global oil production costs, ranging from $ 25 to $ 48 per barrel, depending on the risk of terrain and security. This is very in contrast to low -cost producers such as Saudi Arabia, where production costs are floating between $ 3 and $ 10 per barrel. Experts have appointed bureaucratic congestion, regulatory instability, and expensive local content compliance as a factor that raises operational costs in Nigeria.

In response, the Tinubu administration has introduced a series of policy instruments to overcome this challenge, including oil and gas companies (tax incentives, exemption, remission, etc.) Orders, 2024, and direction to streamline the contract schedule of the petroleum sector. The latest orders are trying to institutionalize fiscal discipline, reduce inefficiencies, and ensure that this sector provides greater economic value.

“This order is a signal for the world,” said President Tinubu. “We are building an efficient, competitive, and working gas sector for all Nigerians. This is about securing our future, creating jobs, and making each barrel counted.”

To ensure implementation, Verheijen has been assigned to lead the inter-institutional coordination team to translate the order of the order policy into real results. With this reform, administration hopes to cover the cost gap with a colleague producer and attract long -term capital to the old sector which is considered full of inefficiency.