…Sets 2029 Deadline to Fast-Track Stalled Deepwater FIDs
President Bola Ahmed Tinubu has signed an executive order granting aggressive tax credits to revive Nigeria’s offshore upstream sector, targeting up to $50 billion in deepwater capital expenditure across projects stalled for decades.
The presidential decree establishes a tax credit of up to $11.50 per barrel for new deepwater crude oil developments, with Shell Plc’s long-delayed Bonga Southwest-Aparo field selected as the flagship development under the new framework. The decree also introduces a tax credit of up to $8.00 per barrel of oil equivalent (BOE) for new non-associated deepwater gas projects.
To compel rapid Final Investment Decisions (FIDs) from International Oil Companies (IOCs), the incentive structure includes a strict sunset clause expiring on December 31, 2029.
Tinubu has made reviving Nigeria’s oil industry a key priority since taking office in May 2023, seeking to reverse years of declining investment and production in a sector hobbled by crude theft, pipeline vandalism and aging infrastructure.
“The countries that attract long-term investment are not necessarily those with the greatest natural resources,” the president said in the statement. “They are the ones that provide the greatest certainty.”
This incentive reflects Nigeria’s determination to build an investment environment defined by clear rules, strong institutions and enduring partnerships, Tinubu said.
Strategic Rationale & Upstream Context
The tax relief package comes as Nigeria aggressively seeks to rebuild its crude production toward 3 million barrels per day (bpd) and expand national reserves to 40 billion barrels.
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Pivot to Offshore Security: With onshore and shallow-water infrastructure severely compromised by pipeline vandalism and oil theft in recent years, major operators including Shell, TotalEnergies, ExxonMobil, and Chevron have shifted focus toward deepwater fields, where operational security and field scale are significantly higher.
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Fiscal Certainty vs. Resource Wealth: “The countries that attract long-term investment are not necessarily those with the greatest natural resources,” President Tinubu stated. “They are the ones that provide the greatest certainty.”
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Unlocking Stranded Gas: The $8.00/BOE credit for non-associated gas aligns with Nigeria’s “Decade of Gas” initiative, providing the economic foundation needed to develop offshore gas reserves for export via NLNG Train 7 and domestic power generation hubs.
The executive order builds on earlier Petroleum Industry Act (PIA) reforms and fiscal adjustments, positioning Nigeria to compete directly with deepwater basins in Guyana, Brazil, and Angola for global offshore capital.
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