FG OFFERS 70:30 PROFIT OIL SPLIT FOR NEW FIELDS

The Federal Government has introduced a 70:30 profit oil-sharing arrangement for new oil fields as part of efforts to attract investment and encourage exploration in Nigeria’s upstream petroleum sector.

Under the proposed framework, investors would receive a larger share of profit oil from qualifying new developments, while the government would retain the remaining portion.

The incentive is aimed at improving the commercial attractiveness of new oil projects, particularly fields that require significant capital investment and advanced technology to develop.

Government officials said the measure was part of broader efforts to increase oil production, attract fresh capital, and unlock more of Nigeria’s petroleum resources.

Industry stakeholders said competitive fiscal terms would be important in attracting investors as countries compete for global oil and gas capital.

They noted that high development costs, regulatory requirements, financing challenges, and operational risks have affected investment in some Nigerian oil assets.

Analysts said the proposed profit-sharing model could encourage international and indigenous oil companies to commit capital to exploration and field development.

They, however, stressed the importance of ensuring that the framework remains transparent and commercially sustainable while protecting government revenue.

Stakeholders also called for faster regulatory approvals, improved security, reliable infrastructure, and stable policies to complement the financial incentive.

The initiative comes as Nigeria seeks to increase crude oil production and strengthen its position in the global energy market.

The government said attracting investment into new fields would help increase production, create jobs, generate revenue, and strengthen the wider petroleum value chain.

Industry experts said the success of the incentive would ultimately depend on how effectively it translates into actual investment, new production, and sustainable development of Nigeria’s oil resources.