Africa’s upstream oil and gas sector remains heavily dependent on five major producers—Nigeria, Algeria, Angola, Egypt, and Libya—even as investment across the continent continues to evolve. According to the International Energy Agency (IEA), these countries account for 70 percent of all upstream oil and gas investment in Africa and contribute 80 percent of the continent’s total production. Despite their dominance, overall investment in these traditional producers has dropped significantly over the past decade.
The IEA disclosed in its 2026 World Energy Investment Report that upstream oil and gas investment across Africa declined to $37 billion in 2025, down sharply from $68 billion recorded in 2016. Investment in the continent’s top-producing nations has fallen from $50 billion to $25 billion during the same period, highlighting growing competition for capital and changing investment priorities in the global energy market. Libya remains one of the few countries to record investment growth despite the overall decline.
While mature producers are witnessing reduced capital inflows, emerging oil and gas nations are attracting increasing investor attention. Countries such as Mozambique, Namibia, Senegal, and Uganda have seen upstream investment rise from $1.5 billion in 2016 to $5 billion in 2025, despite having relatively low production levels. The IEA attributed this trend to the development of large-scale projects, including deepwater exploration and liquefied natural gas (LNG) facilities, which require substantial capital before production begins.
The report also noted that exploration spending across Africa reached nearly $6.5 billion in 2025, driven by ongoing work on recent discoveries. However, exploration remains a high-risk business, with national oil companies (NOCs) playing a larger role amid limited government funding. Budget constraints in several producing countries have forced many NOCs to rely on partnerships with international investors and alternative financing models, particularly in Mozambique and Senegal. The IEA added that private and international oil companies continue to provide the majority of investment, technology, and technical expertise needed to develop Africa’s energy resources.
Looking ahead, the agency projects that upstream investment in sub-Saharan Africa will increase by 12 percent to approximately $24 billion in 2026, following an 18 percent decline in 2025. The report highlighted renewed investments by BP through the Azule Energy joint venture in Angola and Namibia’s Orange Basin, while LNG expansion projects continue in Nigeria and Mozambique. Nigeria is also advancing several deepwater developments in collaboration with international oil majors, reinforcing its position as one of Africa’s most strategic energy destinations despite shifting investment patterns.
source: the cable
