Africa’s upstream sector is entering a more disciplined, selective phase one where capital is no longer chasing breadth, but certainty. Global energy companies, constrained by shareholder pressure, energy-transition mandates, and years of underinvestment, are narrowing their focus. The result is unmistakable: upstream investment in Africa is clustering sharply around a small group of dominant hubs with proven reserves, existing infrastructure, bankable fiscal terms, and scalable gas potential.
This shift does not mark Africa’s decline as a hydrocarbon province. On the contrary, it reflects Africa’s maturation into a more competitive, strategically vital supplier, particularly for offshore oil, natural gas, and LNG in a world that still needs hydrocarbons but demands them with greater efficiency, lower risk, and clearer returns.
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In 2025, the upstream environment has fundamentally changed. According to industry data compiled by Wood Mackenzie, Africa is expected to attract tens of billions of dollars in upstream capital expenditure, but that investment is concentrated in fewer than ten core hubs.
Capital is increasingly concentrating on a select few upstream hubs due to three converging forces: global capital scarcity, the strategic ascendancy of gas (especially LNG) over oil as the primary growth engine, and a diminished appetite for the risks associated with onshore and frontier projects, leading companies to prioritize offshore ventures and target jurisdictions that offer the secure, efficient combination of proven geology, ready infrastructure, and stable, competitive fiscal policies.
Furthermore, this concentration is reinforced by investor demands for stability and efficiency. In a volatile market, capital flows disproportionately to countries offering clear, competitive fiscal terms and regulatory certainty. Simultaneously, the presence of ready-made infrastructure such as pipelines and export terminals lowers both development risk and time-to-market, making established hubs the most attractive and pragmatic destinations for constrained investment.
In 2025, Africa’s upstream oil and gas investment is highly concentrated in eight key hubs, led by Nigeria with an estimated $5.3 billion in capital expenditure, while seven other countries Angola, Republic of Congo, Mozambique, Uganda, Côte d’Ivoire, Ghana, and Gabon are each projected to attract over $500 million, collectively accounting for the vast majority of the continent’s total investment.
Nigeria’s commanding position in 2025, with approximately $5.3 billion in upstream capital expenditure, marks a significant turnaround from years of declining investment, demonstrating that its resurgence as Africa’s leading hub is largely due to policy reforms such as the clarity provided by the Petroleum Industry Act (PIA), specific incentives for gas development, and attractive fiscal terms for deepwater projects.
As Nigeria’s Presidential Energy Adviser, Olu Verheijen, noted:
“Between 2015–2023, Nigeria captured just 4% of sanctioned African FIDs. Over the last two years, Nigeria secured 38%, reflecting the impact of decisive reforms.”
This shift underscores a broader lesson for Africa: policy reform matters as much as geology.
Gas has emerged as the backbone of Africa’s upstream resurgence. Africa holds over 17.8 trillion cubic meters of proven natural gas reserves, positioning the continent as a long-term supplier to global markets. LNG projects in Nigeria, Mozambique, Senegal/Mauritania, and Congo are reshaping capital allocation.
The key developments powering Africa’s gas sector include first production from the Senegal-Mauritania Greater Tortue Ahmeyim LNG project, the expansion of Nigeria LNG Train 7, major offshore LNG initiatives in Mozambique, and new floating LNG developments in Congo, all while domestic strategies increasingly prioritise using gas for domestic power generation and industrialisation.
Projected to grow from approximately 11.4 million barrels of oil equivalent per day in 2026 to around 13.6 MMboe/d by 2030, Africa’s upstream oil and gas sector is poised for expansion, underpinned by a significant investment forecast of $41 billion by 2026 and recent substantial discoveries totaling about 3 billion barrels of oil equivalent in countries like Côte d’Ivoire and Namibia, while the continent’s production remains dominated by established giants such as Nigeria, Algeria, Libya, Angola, and Egypt.
Africa’s nominal GDP was estimated at $2.8 trillion in 2025, with real growth between 3.9% and 4.2%, as the upstream oil and gas sector plays a critically outsized yet uneven role by contributing over 60% of government revenue and up to 90% of export earnings in dependent economies, providing GDP boosts during high-price cycles but simultaneously exposing structural weaknesses through currency volatility and price shocks, thereby highlighting the urgent need for economic diversification.
The African upstream oil and gas sector is undergoing a significant structural transformation, defined by a shift from broad exploration to concentrated investment in select, low-risk hubs. This concentration is driven by a scarcity of global capital, the strategic rise of gas and LNG as primary growth drivers, and a reduced risk appetite among international players. Consequently, investment is flowing to countries that combine proven geology, ready infrastructure, and clear, stable policies, with Nigeria leading the pack in 2025 due to landmark reforms like the Petroleum Industry Act.
This refining of the sector is accompanied by the growing prominence of indigenous companies, who are acquiring assets divested by international oil companies, reshaping local ownership and capital flows. However, the path forward faces persistent headwinds, including security risks, financing constraints, regulatory uncertainty, and a scarcity of final investment decisions. Future competitiveness will hinge not just on resource wealth but on digital adoption for efficiency and the ability to integrate gas development with domestic power and industrial needs, alongside carbon management technologies.
Africa’s upstream sector is not diminishing but consolidating into a narrower, stronger form. Capital is clustering where it can deliver the highest returns with the lowest risk. The opportunity for African nations lies in leveraging this selective investment to build lasting economic value, infrastructure, and industrial capacity. The countries that successfully combine geological potential with decisive reform, operational discipline, and strategic gas utilisation will dominate the sector and define a critical part of the continent’s broader development trajectory.
