Nigeria Launches New Offshore Oil Tax Remission Order

On 6 August 2026, Nigeria's Federal Government enacted the Deep Offshore Oil and Gas Projects Incentives (Tax Remission) Order, 2026, under the Petroleum Industry Act, 2021, and the Nigeria Tax Administration Act, 2025. This Order aims to stimulate investment in the deep offshore petroleum sector, particularly for the Bonga Southwest project, which requires approximately US$20 billion for development.

The Order introduces a new incentive framework for qualifying deep offshore oil and non-associated gas developments, including production tax credits and supplementary incentives. It establishes two categories of production tax credits: the Standard Production Tax Credit (Standard PTC), which applies automatically to qualifying projects, and the Supplementary Production Tax Credit (Supplementary PTC), granted on a case-by-case basis.

The Standard PTC is calculated from the commencement of production, with conditions related to Final Investment Decision (FID) timing, project classification, Nigerian content, project economics, technical costs, and tax-credit utilization.