President Bola Tinubu has approved a sweeping reform of Nigeria’s deep offshore oil and gas sector aimed at unlocking up to $50 billion in new investments and reviving major projects that have remained dormant for years.

The new policy, announced on Tuesday, replaces the long-standing practice of project-by-project negotiations with a transparent, rules-based investment framework designed to provide certainty for investors while safeguarding Nigeria’s long-term economic interests.

According to a statement by the President’s Special Adviser on Information and Strategy, Bayo Onanuga, the reform is expected to support a new generation of deep offshore developments, beginning with the estimated $10 billion Bonga South West project.

The initiative is being implemented through the Deep Offshore Oil and Gas Projects Incentives (Tax Remission) Order, 2026, which establishes clear eligibility criteria and implementation procedures for qualifying projects.

The Presidency said the reform followed Tinubu’s engagement with Shell Plc Chief Executive Officer, Wael Sawan, during which the President directed the development of measures capable of unlocking Nigeria’s vast deep offshore investment potential.

Rather than introducing solutions tailored to individual projects, the Federal Government opted for a broader framework that can be applied across multiple offshore developments, creating a more predictable investment environment for international oil companies and investors.

Under the new regime, the Nigerian National Petroleum Company Limited (NNPC Ltd.) has been authorised to proceed with amendments to eligible Production Sharing Contracts (PSCs) required for the implementation of the framework.

Tinubu said the reform demonstrates his administration’s commitment to creating an investment climate anchored on stability, transparency and strong institutions.

“The countries that attract long-term investment are not necessarily those with the greatest natural resources. They are the ones that provide the greatest certainty,” the President said.

“This reform reflects our determination to build an investment environment defined by clear rules, strong institutions and enduring partnerships. We are creating the conditions for capital to flow, for Nigerian businesses to grow, for our people to prosper and for our natural resources to deliver lasting national value.”

The President commended the Federal Ministry of Justice, Ministry of Finance, Ministry of Petroleum Resources, Nigeria Revenue Service (NRS), NNPC Ltd., Nigerian Upstream Petroleum Regulatory Commission (NUPRC), Nigerian Content Development and Monitoring Board (NCDMB), and industry stakeholders for their roles in developing the framework.

A key component of the policy is a new fiscal incentive package designed to make deep offshore projects more commercially attractive.

A review of the Order, signed on August 6 and published in the Federal Government Gazette on August 10, shows that qualifying projects can receive production tax credits of up to $11.50 per barrel of crude oil.

For projects with reserves of up to 400 million barrels of oil equivalent, investors will receive a production tax credit of $3 per barrel or 20 per cent of the fiscal oil price, whichever is lower, until cumulative production reaches 150 million barrels.

Projects with reserves exceeding 400 million barrels will qualify for a higher tax credit of $4.50 per barrel or 20 per cent of the fiscal oil price, up to cumulative production of 500 million barrels.

Future leases will receive an additional $1 per barrel incentive from the commencement of production up to the approved production threshold.

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The framework also introduces a Supplementary Production Tax Credit, which could increase total incentives to as much as $11.50 per barrel for crude oil projects and $8 per barrel of oil equivalent for non-associated gas projects.

The Nigeria Revenue Service will determine supplementary incentives on a case-by-case basis after evaluating the economic viability of each project.

For gas developments, qualifying projects will receive incentives of up to $1 per thousand standard cubic feet (mscf) of gas sold, depending on the hydrocarbon liquids content of the project.

Beyond tax incentives, the government has introduced what it described as a “Profit Oil Reset,” allowing eligible new developments within existing offshore contract areas to begin profit-sharing arrangements at a 70:30 contractor-to-government ratio.

The provision effectively treats new projects separately from older producing assets, improving their commercial attractiveness while ensuring the government benefits as production increases over time.

To encourage local participation, the reform includes strict Nigerian content requirements.

According to the government, project developers seeking supplementary incentives must ensure that all project-related activities are carried out within Nigeria except where technical limitations, long-lead equipment requirements or significantly higher local costs make foreign execution unavoidable.

Even in such cases, operators must comply with Nigerian Content Plans approved by the NCDMB.

The President’s Special Adviser on Energy, Olu Arowolo-Verheijen, said the policy is not only intended to increase investment and production but also to strengthen domestic industrial capacity.

She noted that qualifying projects would prioritise Nigerian engineering firms, fabrication yards, marine logistics companies, technical service providers and project managers wherever commercially feasible.

“The objective is not only to increase investment and production, but also to create skilled jobs, deepen local supply chains and position Nigeria as Africa’s regional hub for deep offshore project execution,” she said.

The reform comes as Nigeria seeks to reverse years of declining upstream investment, boost crude oil production and strengthen investor confidence in the petroleum sector.

Industry observers believe the framework could mark one of the most significant changes to Nigeria’s offshore investment landscape in recent years, particularly if it succeeds in unlocking multi-billion-dollar projects that have remained stalled due to regulatory uncertainty and fiscal concerns.

With the new incentives now in place, attention is expected to shift to major pending offshore developments, including the Bonga South West project, which could become the first major beneficiary of the policy and signal a new chapter for Nigeria’s oil and gas industry.