KEY POINTS
- Nigeria’s new deep offshore tax incentives are expected to unlock more than $50 billion in fresh oil and gas investment.
- NNPC says projects including Bonga South-West, Zabazaba and Owowo could benefit from the new framework and help raise crude output to 3 million barrels per day by 2030.
- The reform is designed to provide investors with greater fiscal certainty, accelerate Final Investment Decisions and revive Nigeria’s deepwater oil industry.
The Federal Government’s new fiscal incentives for deep offshore oil and gas projects are expected to attract more than $50 billion in fresh investment and help Nigeria significantly increase crude oil production, according to the Nigerian National Petroleum Company Limited (NNPC Ltd.).
The development is part of broader efforts to revive investment in Nigeria’s upstream petroleum industry, particularly in deepwater projects that require huge capital commitments and long development timelines.
NNPC said the signing of the Deep Offshore Oil and Gas Projects Incentives (Tax Remission) Order, 2026, represents a major policy reform aimed at making Nigeria more attractive to international oil companies and other investors.
According to the national oil company, the new framework provides a transparent, predictable and competitive fiscal regime for qualifying greenfield deep offshore developments.
The objective is to give investors greater certainty over the economics of large-scale projects, allowing them to commit capital, reach Final Investment Decisions (FIDs) and move projects from the planning stage into development.
NNPC said the reform is particularly important because deepwater projects require substantial upfront investment and can take years before production begins.
By improving fiscal certainty, the government hopes to reduce investment risks and encourage oil companies to commit funds to projects that could expand Nigeria’s production capacity.
NNPC said the new incentives could unlock more than $50 billion in new investments in Nigeria’s deep offshore oil and gas sector.
Major projects expected to benefit include Bonga South-West, Zabazaba and Owowo Deep Offshore projects.
The Bonga South-West development is particularly significant. Approved in March 2026, it is expected to become the first Final Investment Decision on a Nigerian deepwater Production Sharing Contract asset since 2008.
The project therefore represents an important test of whether recent government reforms can reverse the long period of limited investment in Nigeria’s deepwater sector.
A successful rollout of such projects could increase crude production, expand government revenues and strengthen Nigeria’s position as a major oil-producing country.
NNPC targets 3 million barrels per day
NNPC said the new policy supports the country’s ambition to increase crude oil production to 3 million barrels per day by 2030.
The company’s Group Chief Executive Officer, Bashir Bayo Ojulari, described the Deep Offshore Incentives Order as one of the most important policy interventions in Nigeria’s upstream oil industry in recent years.
According to Ojulari, investors require predictable fiscal conditions before committing billions of dollars to long-term projects.
He said the new framework provides the additional certainty that the industry has been seeking and would help NNPC protect existing production while accelerating new developments.
The policy is also expected to help Nigeria maximise the economic value of its offshore petroleum resources. The Bonga South-West project is expected to play an important role in the renewed offshore investment drive.
Its approval in March 2026 marked a major development because it could become the first deepwater Production Sharing Contract asset in Nigeria to reach FID since 2008.
For more than a decade, Nigeria’s deepwater industry has struggled to attract the scale of new investment required to develop major offshore resources.
The government is now attempting to change that situation through fiscal and regulatory reforms designed to make projects more commercially viable.
If Bonga South-West and other projects reach FID and move into construction, they could create new opportunities across engineering, construction, logistics, marine services and other parts of the oil and gas value chain.
Ojulari said reforms introduced across Nigeria’s petroleum industry have already helped stimulate more than $34 billion in new investment commitments.
He said the new Deep Offshore Incentives Order would build on that momentum by enabling investors to reach FIDs on strategically important offshore developments.
The NNPC chief also linked the latest reform to a wider series of Presidential Executive Orders introduced to improve the operating environment for Nigeria’s oil and gas industry.
The government believes these measures can improve investor confidence, increase production and create a more sustainable foundation for the sector.
Beyond attracting foreign capital, the incentives are expected to support Nigeria’s energy security by increasing domestic oil production.
Higher crude output could strengthen supplies to local refineries while also providing additional volumes for export.
For NNPC, increased production would also support its strategy of protecting existing assets while developing new sources of supply.
The company said the policy is consistent with its broader objective of achieving sustainable production growth, attracting responsible investment and delivering greater value to the Nigerian economy.
