OIL GAS COMPANY TAX INCENTIVES ORDER

What Is This Policy?

The Oil and Gas Companies Tax Incentives Order 2024 is a presidential executive order that grants targeted fiscal incentives, exemptions, and remissions to oil and gas companies operating in Nigeria, covering non-associated gas greenfield developments, midstream gas utilisation investments, and deep offshore oil and gas projects. It is designed to reverse years of underinvestment and attract new capital into Nigeria's upstream and midstream sectors.

Who Does It Target?

Upstream oil companies developing non-associated gas (NAG) greenfield projects in onshore and shallow-water terrains targeting first gas production before January 1, 2029 Midstream gas utilisation companies investing in plant and equipment for new and ongoing gas processing, liquefaction, or distribution projects Deep offshore operators in water depths exceeding 200 metres seeking improved fiscal terms for new brownfield and greenfield investments NNPC Limited's joint venture and production sharing partners evaluating investment decisions for undeveloped Nigerian assets

What Does It Aim to Achieve?

Stimulate new gas production investments by providing Production Tax Credits (PTCs) for non-associated gas greenfield projects, directly reducing tax liability based on volumes produced Incentivise midstream gas processing by granting a 25% investment allowance on qualifying plant and equipment expenditure for gas utilisation companies Improve deep offshore Internal Rate of Return (IRR) to internationally competitive levels by directing the Minister of Finance to introduce additional fiscal incentives for deepwater projects Position Nigeria as Africa's leading oil and gas investment destination under the Petroleum Industry Act 2021's competitive fiscal framework

Key Features

Gas Production Tax Credit (PTC): Non-associated gas greenfield developments earn a PTC of $1.00 per thousand cubic feet (mscf) or 30% of fiscal gas price (whichever is lower) for fields where hydrocarbon liquid content does not exceed 30 barrels per million cubic feet; applicable for 10 years from first gas production Reduced PTC Rate: Where hydrocarbon liquid content exceeds 30 barrels but not 100 barrels per million cubic feet, the PTC is $0.50 per mscf or 30% of fiscal gas price (whichever is lower) 25% Midstream Investment Allowance: Gas utilisation companies receive a 25% investment allowance as a deductible from assessable profits on qualifying plant and equipment for new and ongoing midstream projects Deep Offshore Fiscal Review: The Order mandates the Minister of Finance to introduce separate deep offshore fiscal incentives ensuring competitive IRR for deepwater investments pending a full PIA fiscal review NNPCL Commercial Enablers: Ministry of Finance Incorporated and Ministry of Petroleum Incorporated are directed to engage NNPC Limited on commercial enablers for brownfield and greenfield deepwater investments PTC Carryforward: Unused PTCs in any year are carried forward for up to three years, giving gas producers flexibility across production cycles

Current Status

Rollout Stage: Active; Order gazetted March 6, 2024; NUPRC and FIRS have issued implementation guidance for the PTC mechanism and midstream allowance Implementing Bodies: NUPRC; FIRS; Federal Ministry of Finance; Ministry of Petroleum Incorporated; Ministry of Finance Incorporated Deep Offshore Notice: Following the Order, the Minister of Finance issued a separate Notice of Tax Incentives for Deep Offshore Oil and Gas Production in October 2024, completing the deepwater fiscal framework Industry Response: IOCs and indigenous producers have welcomed the Order as a positive step; investment decisions for deferred gas projects under review following issuance

How to Access

Upstream Gas Operators: Confirm NAG greenfield eligibility with NUPRC; submit gas production data to FIRS for PTC computation; file claims as part of annual PPTA or CITA returns Midstream Companies: Apply the 25% investment allowance on qualifying plant purchases in your CITA return; retain engineering and procurement documentation for FIRS audit purposes New Investors: Contact NUPRC for investment framework briefings and NNPCL Upstream Investment Management Offices for joint venture entry discussions Contact: NUPRC: nuprc.gov.ng | +234 916 901 1150 | FIRS: firs.gov.ng | 0800 1000 3477

Important Terms

PTC Cap: PTCs accruing in any year cannot exceed the company's total CITA or PPTA liability for that same year; excess is carried forward, not refunded First Gas Deadline: PTC eligibility requires first commercial gas production to commence before January 1, 2029; projects achieving first gas after this date do not qualify for the PTC

Official Resources

Website: nuprc.gov.ng | firs.gov.ng | finance.gov.ng Contact: NUPRC, 7 Sylvester Ugoh Street, Jabi, Abuja FCT | FIRS, Revenue House, 15 Sokode Crescent, Wuse Zone 5, Abuja Policy Summary | Source: NUPRC, Federal Ministry of Finance, EY Nigeria, KPMG Nigeria, Mondaq Nigeria, PwC Nigeria | March 2026

Legal Framework

The Oil and Gas Companies Tax Incentives Order 2024 is issued under Section 37 of the Petroleum Industry Act 2021 and the Finance (Control and Management) Act. It operates alongside the Companies Income Tax Act, the Petroleum Profits Tax Act, and the Deep Offshore and Inland Basin PSC Amendment Act 2019. The Order aligns with Nigeria's National Gas Flare Commercialisation Programme, the Gas Infrastructure Blueprint, and the Federal Government's energy transition commitments under the Paris Agreement.