Share on LinkedInShare on LinkedIn

ARTICLE · 27 JUNE 2025

Cost Efficiency Incentives Order, 2025

Balogun Harold Legal
Explore more from Balogun Harold Legal

On May 15, 2025, Nigeria's President issued the Upstream Petroleum Operations (Cost Efficiency Incentives) Order, 2025 granting certain cost efficiency incentives...

NigeriaEnergy and Natural Resources
Olubunmi Abayomi-Olukunle
Olubunmi Abayomi-Olukunle
Adekunle Adewale
Adekunle Adewale

On May 15, 2025, Nigeria's President issued the Upstream Petroleum Operations (Cost Efficiency Incentives) Order, 2025 granting certain cost efficiency incentives (CEI) to lessees, licensees, and their contractors in the upstream petroleum sector who are able to operate below prescribed cost reduction benchmarks set by the Nigerian Upstream Petroleum Regulatory Commission (NUPRC). The CEI is in the form of tax credits and are to be received based on the following formula and to be applied against the overall tax liability of the lessee's or licensee's relevant asset:

"CEI = (CS)* RTR * 50%

Where—

CS = Cost Savings* = (TOC – AOC) *V

RTR = Referenced Tax Rate

AOC = Actual Operating Costs

We operate a free-to-view policy, asking only that you register in order to read all of our content. Please login or register to view the rest of this article.

Register for freeORLog in

View source

Related Articles

Legal Intelligence Newsletters: sign up for the latest legal and regulatory news on your chosen topics

Read more about

Related Comparative Guides

See more popular content from

Article

Nigeria Local Content Law: Guide For Foreign Oil & Gas Firms

Nigeria's oil and gas sector offers significant investment opportunities, but foreign companies must navigate one of Africa's most comprehensive local content regimes. Understanding the Nigerian Oil and Gas Industry Content Development Act 2010 and its enforcement mechanisms is essential for lawful market entry, contract awards, and sustainable operations in this resource-rich jurisdiction.
NigeriaEnergy and Natural Resources
Adeola Oyinlade & Co
Adeola Oyinlade & Co
Article

The Conversion And Renewal (Licences And Leases) Regulations 2026: Closing The Gaps In Nigeria's Post-Pia Upstream Licensing Framework

The Petroleum Industry Act 2021 ("PIA") has fundamentally restructured Nigeria's upstream petroleum licensing framework. Among other reforms, it replaced the previous licensing regime of the Petroleum Act (PA) and changed the licence type nomenclature with the introduction of the Petroleum Exploration Licence (PEL), Petroleum Prospecting Licence (PPL), and Petroleum Mining Lease (PML).
NigeriaEnergy and Natural Resources
Compos Mentis Legal Practitioners
Compos Mentis Legal Practitioners
Article

The Legal Status Of Gas Flaring After The Petroleum Industry Act 2021: Is Routine Flaring Still Indirectly Legal In Nigeria

Gas flaring has been a source of pollution in the Niger Delta region for more than six decades, polluting the atmosphere the soil, and eroding the lives of communities living in one of the most oil-rich regions in Africa. The Nigerian government's efforts at solving this environmental problem have been characterized by delay and capture. The enactment of the Petroleum Industry Act 20212 represents the most ambitious legislative attempt yet to bring routine flaring to an end, through an explicit statutory prohibition, mandatory monetisation planning, and a new institutional architecture anchored around the Nigerian Upstream Petroleum Regulatory Commission.
NigeriaEnergy and Natural Resources
SPA Ajibade & Co
SPA Ajibade & Co
Article

Dangote’s Fresh Suit Against The Federal Government: Tensions In Nigeria’s Midstream And Downstream Petroleum Sector Continue

The Dangote Petroleum Refinery has filed a lawsuit against Nigeria's Federal Government challenging petroleum import licences issued by the regulatory authority, claiming they violate court orders and undermine domestic refining capacity. With the refinery supplying over 81% of national fuel demand in early 2026, this legal battle raises critical questions about Nigeria's path to energy independence and the balance between supporting local production and maintaining competitive fuel markets. The outcome cou
NigeriaEnergy and Natural Resources
Tope Adebayo LP
Tope Adebayo LP
Article

From Consumer To Prosumer: What Nigeria’s 2026 Net Billing Regulations Mean For Businesses Investing In Solar

Nigeria's 2026 Net Billing Regulations represent a transformative shift in the country's energy landscape, enabling businesses to transition from passive electricity consumers to active prosumers who can generate, consume, and sell solar power back to the grid. This regulatory framework introduces new opportunities and considerations for commercial entities looking to invest in renewable energy infrastructure. Understanding the legal and operational implications of these regulations is crucial for businesse
NigeriaEnergy and Natural Resources
Advocaat Law Practice
Advocaat Law Practice
Article

An Analysis Of The Upstream-Midstream Interface: Jurisdiction Over Pipeline Infrastructure

The Petroleum Industry Act 2021 separated upstream regulation from midstream and downstream regulation, but how does that separation apply to pipeline infrastructure that sits between production, transportation, processing and export? This analysis examines the statutory basis of pipeline licensing after Executive Order No. 9 of 2026, how jurisdiction is allocated between the NUPRC and the NMDPRA, and what this means for operators, lenders and project sponsors.
NigeriaEnergy and Natural Resources
Udo Udoma & Belo-Osagie
Udo Udoma & Belo-Osagie