President Bola Tinubu has approved a new tax incentive framework for deep offshore oil and gas projects, designed to attract up to $50 billion in fresh investment, accelerate stalled developments and increase Nigeria’s crude oil production.
President Bola Tinubu announced on Tuesday that he approved the Deep Offshore Oil and Gas Tax Credit Order, 2026—a new fiscal incentive designed to attract large-scale investments into Nigeria’s deep offshore oil and gas sector.
“I have signed the Deep Offshore Oil and Gas Projects Incentives (Tax Remission) Order, 2026, creating a clear and predictable framework capable of unlocking up to $50 billion in deep offshore investment, beginning with the approximately $10 billion Bonga South West project,” the president wrote.
He explained that for too long, some of Nigeria’s biggest offshore opportunities have remained stalled, and that “We cannot afford to leave that opportunity beneath our waters for another decade.”
The president explained that as capital moves, countries compete for the resources, and investors committing billions of dollars over many years need certainty.
“We are providing that certainty, with a clear window for existing deep offshore leases to reach Final Investment Decision by 31 December 2029 and qualify for the full standard incentive,” he said.
The order marks the tenth major policy directive of the Tinubu-led administration targeted specifically at the oil and gas sector. It clearly demonstrates the deliberate efforts being made by the government to remove constraints holding back investment, production and value creation in the country’s oil and gas industry.
But beyond attracting capital, the federal government says it wants the new investments to generate jobs, strengthen Nigerian businesses and build local technical capacity.
“Our natural resources must work harder for our people. Nigeria First,” the president wrote on his official Facebook page on Wednesday.
The deep offshore framework announced on Tuesday came seven months after Shell Plc signalled moves to renew and expand investment push in Nigeria, citing improved political stability, policy consistency, and leadership as key factors driving its confidence in the country’s energy sector.
During a courtesy visit to President Tinubu early this year, the Chief Executive Officer of Shell Plc, Wael Sawan, disclosed the company’s investment plans and explained that Nigeria now stands out as one of the most attractive destinations for capital allocation within Shell’s global portfolio.
“We think there is more to invest here, and we understand the vision that you (President Bola Tinubu) have for the country, and so we are indeed working on a project, Bonga Southwest, that could potentially, if we get to an FID stage, see us, with the partners, invest around $20 billion in foreign direct investment,” Mr Sawan said at the time.
The policy was also announced less than a month after 31 companies emerged winners of 37 oil and gas blocks in Nigeria’s 2025 Licensing Round following the conclusion of the commercial bid conference held in Abuja last month.
Nigeria has significant oil and gas resources located in deep offshore fields, but several large projects have remained undeveloped for years. Similarly, oil and gas exploration activities across Nigeria’s major oil fields have generated significant environmental and economic impacts over the past decades. Shell’s activities across the Niger Delta have resulted in a plethora of environmental issues including several lawsuits. Pipeline vandalism, insecurity and vague regulations/policies have also prevented investors from investing in Nigeria’s deep and shallow reserves at a larger scale.
On Tuesday, the government says high development costs, complex project economics and uncertainty over fiscal terms have discouraged investors from committing the billions of dollars required to develop these fields.
Deep offshore projects are particularly capital-intensive because they require specialised vessels, drilling equipment, subsea infrastructure and advanced technology.
At the same time, oil companies have several investment options around the world and generally commit capital to projects where the fiscal and regulatory environment provides sufficient certainty over the long term.
The new framework is therefore intended to make Nigeria’s deep offshore projects more competitive and give investors clearer terms for making long-term investment decisions.
The federal government estimates that the new framework could unlock up to $50 billion in fresh deep offshore investments.
One of the major projects expected to benefit is the Bonga Southwest-Aparo development, which has an estimated investment requirement of about $10 billion.
The government expects the policy to help move such projects from prolonged delays to final investment decisions, construction and eventual production.
Projects that commence investment within the qualifying period, up to 31 December 2029, are expected to benefit from the incentives provided under the framework.
A review of the 13-page order document by the government indicated that the Nigerian government is offering investors a more favourable and clearer tax treatment to improve the economics of qualifying deep offshore projects.
The idea is to reduce the tax burden associated with developing these capital-intensive fields, thereby improving their expected returns and making them more attractive to investors.
For companies considering whether to commit billions of dollars to a project that could take years to develop and operate for decades, the certainty provided by a clearly defined fiscal framework can be as important as the size of the incentive itself.
The newly signed order has provided a distinctive framework for the government and prospective/eligible investors to operate in an atmosphere that is fair and beneficial to both parties.
The government says the policy is not simply about attracting foreign capital.
President Tinubu has emphasised that the new investments should also translate into tangible benefits for Nigerians.
The approved projects are expected to create employment for indigenous engineers, welders, technicians, marine workers and other professionals. Likewise, it is projected that local companies could benefit from opportunities in fabrication, marine services, logistics, engineering and other areas of the offshore supply chain.
Additionally, the Nigerian government wants more fabrication, equipment supply, technical services and training to take place locally rather than being outsourced entirely overseas.The projects are expected to provide opportunities for Nigerian workers to acquire specialised skills needed in the offshore oil and gas industry.
