Upstream investment in Africa: what does the future hold as new investment hotspots replace legacy producers?

In an upcoming webinar, A changing of the Guard in Africa's Upstream Investment Landscape, we will be discussing the changes that are happening in Africa's Upstream Investment landscape.  

Fill in the form on the right of the page to secure your place on the webinar, which will take place on the 30th May 2024 and read on for an overview of the challenges and opportunities in Africa’s upstream industry. 

An expected increase in green field investment 

In the last decade, Africa accounted for 12% of green field investment, and we expect this share to increase in the coming years. Over half of future investment on pre-sanctioned projects is earmarked for gas and liquefied natural gas (LNG). 

Legacy producers have dominated recent upstream spend in Africa. However, a changing of the guard will see Namibia, Mozambique and Cote d’Ivoire climb the ranks in the late 2020s to become new investment hotspots.  

After years of underinvestment, Libya will also return to the fold, becoming a top investment destination. The increased spend in these countries will be driven by ultra-deepwater oil, shallow water gas, and giant onshore LNG projects. 

A gradual decline in spending for traditional big players 

Despite a predicted drop in spending for the big players: Nigeria, Angola, Algeria and Egypt, the decline will be gradual. We expect that only Egypt will fall from the top six this decade.  

Total African upstream spend in 2015 was US$60 billion, which dropped to US$25 billion  during the pandemic’s trough in 2020. Investment in deepwater and shelf was pared back aggressively. But we expect a recovery in these resource themes, combined with increased spend in LNG, to restore spending to pre pandemic level by 2025.  

Recent fiscal reforms in Algeria and Egypt have increased competitiveness in Africa’s upstream industry. Namibia stands out with high prospectivity and attractive fiscal terms in our Upstream Competitive Index. And Mozambique has stable terms and good deepwater prospectivity. By 2027, Mozambique could become the top  country for investment in Africa. 

The need to optimise Africa’s resource potential 

National oil companies (NOCs) and indigenous companies have been acquirers of mature assets which the Majors have divested. However, accessing capital has often proven difficult, and most assets the Majors have divested from have not seen an uptick in investment.  

Companies and governments must work hard to optimise the continent’s resource potential as the Energy Transition gathers pace. 

Recent finds in Namibia and Cote d’Ivoire demonstrate that exploration still has an important role to play, despite E&A budgets being smaller. 

Register to join the webinar 

To learn more about the changes happening in Africa's upstream investment landscape, sign up for our webinar, which will take place on the 30th May 2024.  

Throughout the presentation we will discuss where Africa’s upstream investment is trending, what resource themes companies are investing in, and whether Africa is still key to the majors’ portfolios. We will also explore how NOC spending has changed, upcoming final investment decisions (FIDs) and where we expect exploration spend to be concentrated.