Revitalisation meets frontier exploration in West Africa’s twin-track energy future

A compelling dual narrative is changing West Africa’s energy landscape. Oil giants Nigeria and Angola are implementing pragmatic fiscal reforms to breathe new life into their mature offshore basins.  

All the while, a parallel wave of high-impact exploration is unlocking the vast, untapped potential of the region's deeper Cretaceous plays. However, despite these bold ambitions, the path to commercialising new discoveries remains fraught with challenges. 

Ahead of Wood Mackenzie’s speaking engagements at Africa Energy Week, we invite you to fill in the form on the right of the page to download the full slide deck with more insights into West Africa’s upstream fiscal service. Or, read on for an overview of the impact of West Africa’s dual strategy. 

New incentives revive investment appetite and trigger fresh deepwater commitments 

Faced with declining production, Nigeria and Angola have enacted sophisticated incentives to stimulate investment. Angola’s approach is a model of targeted, surgical policy-making. Its new incremental production terms were introduced in late 2024 and are specifically designed to make smaller infill and tie-back projects economically viable.  

By lowering royalties and taxes and improving cost recovery, Angola has successfully bridged an investment gap, turning marginal opportunities into attractive ones. The positive industry response includes a new discovery by ExxonMobil, which validates the country’s focused strategy. 

Nigeria is pursuing a similar goal with a broader suite of incentives under its Petroleum Industry Act (PIA). For deepwater oil, the policy is a game-changer, providing substantial tax credits that were decisive for Shell’s Bonga North project – the first major deepwater final investment decision (FID) in over a decade.  

The new tax credits improve returns for its vast gas resources, but a fundamental market constraint exists. A regulated domestic gas price of just US$2.18/mcf is well below the breakeven cost for most standalone gas developments. This highlights a critical lesson that fiscal incentives can unlock commercially attractive projects, but they cannot single-handedly overcome market and infrastructure deficiencies. 

Deeper Cretaceous plays open a new frontier across West Africa 

While Nigeria and Angola work to revitalise their existing assets, a more dramatic story of frontier exploration is unfolding across West Africa offshore. A strategic pivot from traditional Tertiary-age reservoirs to deeper, more complex Cretaceous plays has gained momentum.  

The shift is driven by major players like TotalEnergies and Shell, and has been catalysed by a string of game-changing discoveries like Ghana’s Jubilee, Venus and Graff in Namibia, and Baleine in Côte d’Ivoire. 

Successful exploration highlights West Africa’s potential, yet market realities define outcomes 

This Cretaceous exploration campaign has delivered world-class technical success rates. Over half of the high-impact wells drilled between 2015 and 2025 resulted in discoveries, yielding a massive 13 billion barrels of oil equivalent.  

Yet, the commercial reality is more sober. Over half of these discovered resources remain sub-commercial, hindered by challenges such as low reservoir permeability and, critically, the lack of viable markets and infrastructure for the associated gas.  

The rapid development of Baleine, which feeds into Côte d'Ivoire's established domestic gas market, stands in contrast to the slower progress at Namibia's oil and gas discoveries. This shows that above-ground factors are just as important as below-ground potential. 

Ultimately, West Africa's upstream future depends on the successful execution of both strategies. Fiscal ingenuity in mature basins is essential to sustaining production and funding further development. At the same time, continued exploration success in frontier plays can deliver the next generation of world-class energy projects.  

The path forward requires a blend of pragmatic governance to maximise existing value and bold geological vision to unlock the next great African hydrocarbon province. 

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