Nigeria’s new fiscal incentives for deep offshore oil and gas projects could unlock more than $50 billion in fresh investment and accelerate the development of major offshore projects, according to the Nigerian National Petroleum Company Limited (NNPC Ltd.) and government officials.
President Bola Tinubu signed the Deep Offshore Oil and Gas Projects Incentives (Tax Remission) Order, 2026, on August 6, introducing a more predictable fiscal framework for qualifying deep offshore developments. The order was subsequently gazetted as Statutory Instrument No. 37 of 2026.
The new framework replaces much of the previous project-by-project approach with defined eligibility requirements and tax incentives intended to give investors greater certainty before committing capital to costly offshore developments.
The approximately $10 billion Bonga South West project is expected to be among the first major developments to benefit from the new framework.
NNPC Ltd. said the policy could unlock more than $50 billion in investments, including projects such as Bonga South West, Zabazaba and Owowo, while supporting Nigeria’s ambition of reaching three million barrels of oil production per day by 2030.
The reform is designed to accelerate Final Investment Decisions (FIDs) on projects that have faced delays because of high development costs and uncertainty over fiscal terms.
Under the order, qualifying deep offshore projects can access production tax credits subject to specific conditions.
For certain qualifying oil developments, the standard production tax credit is set at $3 per barrel or 20 per cent of the fiscal oil price, whichever is lower, up to a specified cumulative production threshold. The overall combined production tax-credit benefit for qualifying projects is subject to an $11.50-per-barrel ceiling.
The framework applies to qualifying existing leases where Final Investment Decisions are made within the stipulated period, as well as eligible future leases.
The Federal Government sees increased offshore investment as critical to reversing years of stagnating production and developing Nigeria’s substantial deepwater reserves.
The new incentives are expected to encourage oil companies to commit capital to projects that could significantly increase future crude and condensate output.
NNPC said the reform would strengthen Nigeria’s competitiveness in attracting international capital while supporting the country’s long-term three-million-barrel-per-day production ambition.
Beyond attracting foreign capital, the framework places emphasis on ensuring that offshore developments generate greater economic activity within Nigeria.
Government officials said qualifying projects are expected to maximise execution within the country where commercially and technically feasible, creating opportunities for Nigerian engineering firms, fabrication companies, marine logistics operators, technical service providers and project-management businesses.
The policy therefore represents an attempt to combine increased oil production with greater domestic participation in the offshore value chain.
The success of the new framework will ultimately depend on whether it translates investor interest into actual Final Investment Decisions, construction activity and new production.
With major offshore developments requiring billions of dollars and several years before production begins, the incentives are intended to provide the stability investors need to commit long-term capital.
For Nigeria, the stakes are significant: successfully unlocking the country’s deep offshore projects could increase oil production, attract billions of dollars in foreign investment, generate jobs and strengthen government revenues at a time when the economy remains heavily dependent on petroleum exports.