Tinubu Appends New Executive Order in Energy sector

… Caps Tax Credits at 20%

By Friday Obande

A new Executive Order has been issued by President Bola Tinubu to lower project costs, as well as attract investment.

The order is also expected to enhance revenues from oil and gas operations.
Special Adviser to the president on energy, made this known in a statement tagged the ‘Upstream Petroleum Operations Cost Efficiency Incentives Order (2025)’, also caps tax credits to firms at 20 percent.

As a form of government incentive, a tax credit is the amount of money a company can subtract from the income tax it owes to the state.

According to the statement, the EO introduces performance-based tax incentives for upstream operators who deliver “verifiable cost savings” aligned with 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 statement reads.

“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.”

On the new presidential order, President Bola Tinubu said 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,” he said.

The president asked Olu Verheijen, his Special Adviser on Energy, to spearhead inter-agency coordination, ensure alignment across key government institutions and translate policy objectives into measurable outcomes.
Verheijen who applauded the order, noted that the new order 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,” she added.

The statement further shows that this new order builds on the administration’s 2024 presidential reform directives, which introduced enhanced fiscal terms, streamlined project timelines and aligned local content policies with global best practices.