Nigeria has rolled out a new fiscal and regulatory package for offshore oil and gas projects as the government seeks to attract as much as US $50 Bn in fresh investment and accelerate developments that have remained stalled for years.
President Bola Tinubu approved the Deep Offshore Oil and Gas Projects Incentives framework as Nigeria looks to address persistent challenges facing its upstream industry. High project costs, regulatory uncertainty and increasing competition for international oil investment have made it more difficult to bring major offshore developments to the investment stage.
The new framework is intended to provide investors with greater certainty by moving away from individually negotiated incentives toward a standardized system. Presidential spokesperson Bayo Onanuga said the government would implement the measures through a tax remission order, establishing clearer and more predictable fiscal conditions for qualifying projects.
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Goal
Officials expect the incentives to help revive several major offshore developments. Among the projects likely to benefit is Shell’s proposed Bonga South West development, an estimated US $10bn project that has experienced lengthy delays. The development is currently expected to reach a final investment decision in 2027.
Under the new arrangement, NNPC Ltd will also be able to modify eligible production-sharing contracts with oil and gas producers to accommodate the incentive framework. The move is aimed at removing contractual obstacles that could prevent commercially viable projects from progressing. The government is also linking the incentives to increased participation by Nigerian companies and workers. Beneficiary projects will be expected, where feasible, to maximize local content, potentially boosting employment, domestic procurement and the wider oilfield services industry.
Nigeria has been seeking to revive upstream investment as production challenges and years of underinvestment have constrained the sector. The government sees offshore developments as a key source of future oil output, particularly as many mature onshore fields face declining production. By introducing a more uniform fiscal regime and reducing uncertainty around project economics, Abuja hopes the new incentives will make large-scale offshore developments more attractive to international investors and help convert long-delayed projects into active investments.
