NNPC Implements Revised Production Sharing Contract Framework

• NNPC Limited to implement revised Production Sharing Contract framework.
• New incentive regime expected to unlock up to $50 billion in new investment.
• Bonga South West project set to be the first beneficiary of the policy.
• Revised PSC framework aims to simplify and attract investment in Nigeria's deep offshore oil and gas sector.

Nigeria Just Made Offshore Oil Investment Simpler and More Attractive. President Bola Tinubu has signed the Deep Offshore Oil and Gas Projects Incentives (Tax Remission) Order, 2026, replacing years of case-by-case negotiation with one clear, transparent framework.

The Nigerian National Petroleum Company Limited (NNPC) is poised to implement a revised Production Sharing Contract framework, following the Federal Government's approval of a new incentive regime. This move aims to simplify and attract investment in Nigeria's deep offshore oil and gas sector. According to Bayo Ojulari, NNPC Group Chief Executive Officer, the new framework will provide greater certainty for investors, replacing years of case-by-case negotiations with a clearer and more transparent regime. The policy is expected to unlock up to $50 billion in new investment, with the Bonga South West project set to be the first beneficiary. Ojulari emphasized that NNPC Limited will serve as the Federal Government's nominated counterparty and is prepared to implement the amendments to the PSC framework.

The new incentive regime, which includes the Deep Offshore Oil and Gas Projects Incentives (Tax Remission) Order 2026, aims to improve the investment environment in Nigeria's oil and gas sector. This is part of the Federal Government's broader efforts to revive investment in the sector by providing clearer fiscal and regulatory terms for investors. The policy is expected to translate into increased economic activity, job creation, and deeper participation by Nigerian businesses in the offshore oil industry. According to Ojulari, this means more jobs for Nigerians, deeper local supply chains, and faster progress toward Nigeria's 3 million barrels per day production ambition by 2030.

The revised PSC framework is expected to strengthen Nigeria's ability to compete for international capital at a time when oil-producing countries are seeking to attract investment into increasingly complex and capital-intensive offshore developments. Ojulari noted that certainty attracts capital, and Nigeria is showing the world it's ready. The policy will also support additional spending across the Nigerian oilfield services and supply chain, potentially creating opportunities for local contractors and service providers.

Lawyers should watch for the potential increase in investment and economic activity resulting from this policy, which may lead to new opportunities for clients in the offshore oil industry. Compliance officers should also be aware of the changes to the PSC framework and their implications for existing contracts.

Source: Original reporting via Punch Newspapers