Tinubu Issues Executive Order to Slash Oil Production Costs

By Adedapo Adesanya

President Bola Tinubu has signed the Upstream Petroleum Operations Cost Efficiency Incentives Order, 2025— a  landmark presidential directive designed to cut operational costs, enhance fiscal discipline, and attract more investment into Nigeria.

The new order, announced by the Special Adviser to the President on Energy, Ms Olu Verheijen, is seen as a bold response to rising concerns over Nigeria’s dwindling oil competitiveness amid softening global oil prices and increasingly selective capital.

“This is a bold and pragmatic step to make Nigeria’s upstream sector more globally competitive, fiscally resilient, and investor-aligned,” Ms Verheijen said in a statement.

According to her, the order introduces three key pillars that will drive down costs and encourage efficiency: “Links tax incentives to verifiable cost savings. Establishes terrain-specific cost benchmarks (onshore, shallow water, deep offshore). Caps credits to protect government revenue while rewarding efficient operators.”

“These reforms mark a transition from intent to execution, with performance, discipline, and value at the center,” Ms Verheijen noted.

The new order, according to the Presidential Advisor, complements previous reform initiatives under the Tinubu administration, including improved fiscal terms, faster contracting processes, and more commercially realistic local content regulations.

Nigeria has recent years sought to cut its high oil production costs, which is higher than that of regional and global peers, especially in deep water projects.

If executed, the new presidential directive is expected to close this competitiveness gap and unlock dormant upstream assets by incentivizing leaner, smarter operations.

“With this order, we are telling the world that Nigeria is serious about putting every barrel to work, for our economy, for investors, and for the future of Nigeria’s energy security,” Ms Verheijen added.

The government now hopes this policy shift will not only boost oil output and revenue but also position Nigeria more favorably among energy investment destinations in Africa and globally.