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🇳🇬 Nigeria /Energy & Infrastructure

NNPC Ready to Implement New Production Sharing Contract Framework

From The Punch · () English

Translated from English, summarized and contextualized by DistantNews.

At a glance

News Sources not specified New plan
  • Nigeria's NNPC Limited is ready to implement an amended Production Sharing Contract (PSC) framework following government approval of new incentives for deep offshore projects.
  • The new framework replaces years of case-by-case negotiations with a transparent regime expected to unlock up to $50 billion in new investment.
  • The Bonga South West project is slated to be the first beneficiary, with the policy aiming to boost economic activity, create jobs, and increase local participation in the offshore oil industry.

The Nigerian National Petroleum Company Limited (NNPC) is prepared to enact a revised Production Sharing Contract (PSC) framework. This follows the Federal Government's approval of a new incentive structure designed to attract investment in deep offshore oil and gas projects. NNPC Group Chief Executive Officer, Mele Kyari, announced the readiness to implement the changes.

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.

— Mele KyariAnnouncing the new policy on his official X handle.

President Bola Tinubu has signed the Deep Offshore Oil and Gas Projects Incentives (Tax Remission) Order, 2026. This new policy replaces a lengthy process of individual negotiations with a clear, transparent framework. Kyari stated that this move is expected to unlock as much as $50 billion in new investments, with the Bonga South West project identified as the initial beneficiary.

Up to $50bn in new investment. Bonga South West as the first beneficiary. And NNPC Limited standing as the Federation’s nominated counterparty, ready to implement the PSC amendments to bring it to life.

— Mele KyariDetailing the expected impact of the new framework.

Kyari emphasized that the updated framework will lead to increased economic activity, job creation, and greater involvement of Nigerian businesses in the offshore sector. He anticipates this will accelerate progress toward Nigeria's goal of producing 3 million barrels per day by 2030. The policy aims to enhance Nigeria's competitiveness in attracting global capital for complex offshore developments.

This means more jobs for Nigerians, deeper local supply chains, faster progress toward our 3 million barrels per day production ambition by 2030.

— Mele KyariHighlighting the anticipated economic benefits.

Deep offshore projects are inherently capital-intensive due to technical complexities and long development timelines. The government's initiative seeks to improve the investment climate by offering incentives to encourage oil companies to proceed with major projects that have faced delays. The Bonga South West project, a joint venture involving Shell, is a key offshore development expected to significantly contribute to Nigeria's future crude oil output.

As always, certainty attracts capital. Nigeria is showing the world it’s ready.

— Mele KyariCommenting on Nigeria's attractiveness to investors.
DistantNews Editorial

Originally published by The Punch in English. Translated, summarized, and contextualized by our editorial team with added local perspective. Read our editorial standards.

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