Many of Africa’s resource-rich countries have stepped up efforts to become more attractive for exploration and production (E&P) investment. Reforms in licensing rounds, production sharing contracts and tax policy are improving investor returns and are expected to drive $41 billion in upstream investments in 2026, the African Energy Chamber’s State of African Energy 2026 Outlook report shows.
From former oil producers Nigeria and Angola to emerging exploration hotspots like Namibia, African resource holders are looking to compete with other regions for the billions of US dollars that foreign investors could pour into their energy and mineral sectors.
Longstanding producers, including major oil producers Nigeria, Libya and Angola, have made their tax and licensing policies more attractive, and aspiring emerging producers are offering incentives. All African countries are committed to promoting the exploration, production and development of natural gas amid a growing demand for gas and LNG for domestic use and for export to Europe and Asia.
“The continent offers compelling opportunities for investors who are prepared to participate in a transparent, regulated and increasingly competitive exploration and production landscape,” AEC CEO NJ Ayuk said in a statement.
“Governments and operators must continue to balance national priorities with investor confidence to unlock Africa’s vast hydrocarbon potential.”
Reforms in recent years have allowed Angola to improve its surface risk score since 2017, reflecting extensive regulatory and institutional reforms. Angola’s tax incentives, including conditions for gas, marginal fields and incremental production, have successfully attracted upstream investments, cementing its status as a continental leader, according to the AEC report.
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As Angola attempts to reverse years of decline in oil production, it is betting heavily on independent gas development and has just launched its first plant to process non-associated natural gas.
Angola is also seeking to accelerate the permitting phase for new mineral projects to attract investment. In October, Angola began production at its first major copper mine, Tetelo, as the country seeks to diversify into critical minerals.
Nigeria, Africa’s top oil producer, is auctioning 50 oil and gas blocks, forecasting $10 billion in new investment over the next ten years and 400,000 barrels per day (bpd) in additional production capacity.
Nigeria’s licensing program with updated terms and incentives targeted at specific land and resource types has renewed interest in projects in the country and increased investor confidence in upstream potential, as demonstrated by recent project approvals by Shell and TotalEnergies, AEC said.
Senegal and Ivory Coast in West Africa have also attracted interest and investment from large international companies.
Ivory Coast has seen big companies expand offshore development, and its huge Baleine oil and gas field began producing two years after discovery, thanks to Italy’s Eni.
According to the African Energy Chamber, Côte d’Ivoire maintains a pragmatic approach to foreign investment and, regardless of the outcome of the 2025 presidential election, authorities are expected to continue supporting upstream investors while emphasizing compliance with local content requirements, particularly for offshore developments.
Real GDP growth in Senegal is expected to be around 7.9% this year, boosted by the first full year of oil and gas production, the International Monetary Fund (IMF) said last month. Senegal’s record economic growth rates followed the commissioning of the Sangomar oil field off the West African country’s coast in June 2024, when Australia-based Woodside launched the country’s first offshore oil project.
Then there is the new exploration hotspot, Namibia, which is transitioning to full producer status under President Netumbo Nandi-Ndaitwah, the AEC report notes. The country has consolidated oversight of oil and gas under the presidency and is establishing an independent hydrocarbon regulator.
However, proposed increases in national oil company NAMCOR’s share and local content requirements could delay project approvals during a critical phase of development, the African chamber warned.
Major oil and gas companies including Shell, TotalEnergies, BP and Portugal-based Galp have made large discoveries offshore Namibia.
Namibia hopes to become the next Guyana, but lacks the infrastructure to accelerate discoveries, making them more expensive and difficult to develop and monetize.
Earlier this year, a senior official said Namibia expects TotalEnergies and Norway’s BW Energy to make final investment decisions on oil projects by the end of 2026.
Last but not least, Mozambique is inching towards a cautious restart of onshore LNG projects following the stabilization of post-election political challenges and improved security in the Cabo Delgado area, the AEC said.
A few weeks ago, TotalEnergies lifted the four-year force majeure on the $20 billion Mozambique LNG project, and so did ExxonMobil for a separate project, the long-stalled Rovuma LNG, in northern Mozambique.
Across Africa, resource nationalism in the form of increased local content requirements and involvement of national energy companies in projects could slow the approval of new projects, but the tide appears to have turned and big companies are keen to develop Africa’s oil and gas potential.
By Tsvetana Paraskova for Oilprice.com
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