On a continent rich in untapped hydrocarbon resources, Africa is positioning itself as a prime destination for oil and gas investments amid global energy demand. From legacy producers like Nigeria and Angola to emerging frontiers such as Namibia and Mozambique, African nations are reforming fiscal policies, licensing rounds, and production-sharing agreements to lure international capital. This strategic embrace of oil and gas is not just about extraction—it’s driving economic growth, job creation, and infrastructure development that directly benefits local populations while stabilizing global markets hungry for reliable energy supplies. As upstream spending is forecasted to hit $41 billion by 2026, the revival signals a win-win for Africans and investors alike.
Major Oil Companies Ramping Up CapEx in Africa
Supermajors and independents are flocking back to Africa, enticed by improved security, political stability, and investor-friendly reforms. Shell and TotalEnergies are leading the charge in Nigeria, where recent project approvals align with the country’s auction of 50 oil and gas blocks aimed at securing $10 billion in investments over the next decade to add 400,000 barrels per day (bpd) to production capacity.
In Namibia, TotalEnergies, alongside Norway’s BW Energy, anticipates final investment decisions on major offshore oil projects by late 2026, building on massive discoveries that could mirror Guyana’s success.
BP and Portugal’s Galp have also struck significant finds offshore Namibia, while Eni is expanding in Côte d’Ivoire with new offshore blocks and rapid production starts at the Baleine field.
Further south, ExxonMobil has lifted force majeure on Mozambique’s Rovuma LNG project, and TotalEnergies is advancing its $20 billion Mozambique LNG initiative following security improvements.
Woodside kicked off Senegal’s first offshore oil production at the Sangomar field in June 2024, contributing to the country’s projected 7.9% GDP growth in 2025.
Emerging players like Eco Atlantic are forming strategic partnerships, such as with Navitas Petroleum, to bolster exploration efforts.
Overall, these companies are channeling billions into CapEx, with Africa’s oil and gas exploration investments expected to exceed $35 billion by 2026, heavily driven by projects in Mozambique and Angola.
In the past decade, roughly half of Africa’s energy investments have targeted oil and gas, predominantly by private firms eyeing exports.
What This Means for Investors
For investors, Africa’s energy boom presents compelling opportunities in a landscape of high returns and reduced above-ground risks. Reforms have enhanced transparency and competitiveness, drawing supermajors back after years of hesitation. The focus on natural gas for domestic use and exports to Europe and Asia aligns with global decarbonization trends while offering lucrative upstream plays.
Events like Angola Oil & Gas 2025 serve as key platforms for connecting global capital with high-impact projects, fostering deals that could yield substantial dividends.
However, investors must navigate rising local content requirements and shares for national oil companies, such as Namibia’s NAMCOR, which could extend project timelines.
Despite these hurdles, the outlook is positive: Africa’s short-term oil production is set for stability in 2025, with volumes reaching new highs, signaling resilience and potential for portfolio diversification in energy equities.
Gulf investors are also pouring in, with pledges soaring as Africa integrates into shifting global trade dynamics.
Implications for the Oil and Gas Markets
This surge in African drilling activity will bolster global oil and gas supplies, helping to temper price volatility amid geopolitical tensions elsewhere. Increased production from Nigeria’s targeted 400,000 bpd boost and Angola’s reversal of declining output through new gas plants and exploration deals will enhance fiscal resilience and export volumes.
Major LNG projects, including Tanzania’s LNG Liquefaction Plant and Mozambique’s Rovuma LNG, are poised to meet rising demand for cleaner fuels, positioning Africa as a key supplier to Asia and Europe.
The continent’s energy revival could add much-needed diversity to global markets, reducing reliance on Middle Eastern and Russian supplies. With 2025 shaping up as a transformational year for transactions and policies, markets may see stabilized benchmarks and new trading hubs emerge.
For Africans, this means economic multipliers: Senegal’s oil exports are already fueling record growth, while broader investments promise energy access, industrialization, and poverty reduction.
Countries Impacted by Growth in Drilling Activity
Several nations stand to gain significantly:
Nigeria: As Africa’s top producer, it’s leading with 50 new blocks and $10 billion in investments, revitalizing output and economy.
Angola: Improved outlook through concessions and reforms, accelerating mining and gas developments for diversification.
Namibia: Transitioning to producer status with offshore megadiscoveries, though infrastructure lags.
Mozambique: LNG restarts post-stabilization, driving $41 billion continent-wide investments.
Senegal: First oil boosting GDP to 7.9% in 2025.
Côte d’Ivoire: Offshore expansions emphasizing local content.
Tanzania: Upcoming LNG projects enhancing regional energy hubs.
Potential Hot Spots for Geopolitical ProblemsWhile optimism abounds, geopolitical risks loom. Resource nationalism could delay approvals, as seen in Namibia’s regulatory shifts and Mozambique’s past security woes in Cabo Delgado—though now stabilized.
Broader concerns include volatility from energy transitions, policy inertia, and global conflicts spilling over, potentially inflating energy costs in nations like Nigeria.
The World Economic Forum’s Global Risks Report 2025 highlights escalating conflicts as a top immediate worry, which could amplify oil network centrality and suppress renewables.
Stock markets in oil-dependent economies may face asymmetric shocks from geopolitical risk (GPR), underscoring the need for vigilant hedging.
Fast-moving tech and politicized regulations add layers of uncertainty for energy firms.
In conclusion, Africa’s oil and gas embrace is a catalyst for prosperity, offering benefits from local empowerment to market stability. As 2025 unfolds, balanced navigation of risks will unlock the continent’s full potential. We will reach out to NJ Ayuk, JD, MBA, Executive Chairman of the African Energy Chamber, to discuss these and other updates. He has appeared twice on the Energy News Beat podcast and has valuable insights. We will also be writing a longer-form Substack article on the current changes to African energy development. It appears that even Bill Gates’s flop had some downstream resilience for Africa and African jobs.
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