By NJ Ayuk, Executive Chairman, African Energy Chamber<\/p>\n\n\n\n
Two breakthrough offshore discoveries in Namibia in 2022 \u2014 one by Shell and one by TotalEnergies \u2014 marked an important milestone for the country\u2019s future energy landscape and for Africa\u2019s broader upstream ambitions.<\/p>\n\n\n\n
The excitement generated by high-impact discoveries creates a ripple effect that benefits the entire continent. I\u2019m convinced that the ongoing interest we\u2019re seeing today in African exploration and production (E&P) stems in part from the major discoveries in Namibia, alongside recent successes in C\u00f4te d\u2019Ivoire, Angola, and Egypt.<\/p>\n\n\n\n
When you factor in advances in E&P technology, the promise of newly emerging basins, and the continued strength of Africa\u2019s established producing regions, there are genuine reasons to feel confident about the future of African oil and gas.<\/p>\n\n\n\n
That sentiment is reflected in the African Energy Chamber\u2019s 2026 Outlook Report, \u201cThe State of African Energy,\u201d which projects renewed momentum in the continent\u2019s upstream market during the next several years. According to the report, global E&P capital expenditure (capex) is forecast to reach approximately USD504 billion by 2026, with Africa contributing about USD41 billion.<\/p>\n\n\n\n
Africa\u2019s hydrocarbon production is expected to remain stable at roughly 11.4 million barrels of oil equivalent per day (boe\/d) through 2026, and new projects are on track to increase output toward 13.6 million boe\/d by 2030.<\/p>\n\n\n\n
Yes, the report acknowledges that optimism is being tempered by caution. Keen to protect their balance sheets, investors are scrutinizing opportunities closely. But overall, the potential for sustained upstream expansion is truly promising for African states with petroleum reserves. The key will be doing as much as possible to attract the capital needed to pursue the next wave of discoveries.<\/p>\n\n\n\n
Frontier and Emerging Basins Signal Strong New Potential<\/strong><\/p>\n\n\n\n As investors weigh their options, the most compelling signs of progress are coming from Africa\u2019s frontier and emerging basins.<\/p>\n\n\n\n In Namibia\u2019s Orange Sub-Basin, where more than 6 billion boe have been discovered in less than four years, operators are preparing the next wave of high-impact wells. C\u00f4te d\u2019Ivoire, meanwhile, is seeing a surge of activity around its recent deepwater finds.<\/p>\n\n\n\n Egypt, which already has long history as a producing state, is experiencing fresh momentum in underexplored offshore acreage. Earlier this year, drilling in the Herodotus Basin confirmed gas at the Nefertari-1 well.<\/p>\n\n\n\n Even in Libya, where hydrocarbons have been produced for decades, frontier acreage remains. BP and Eni aim to spud the Matsola-1 ultra-deepwater gas prospect later this year. If it delivers, the well could pave the way for deeper Sirte Basin exploration and reduce geological risk across the broader Gulf of Sirte.<\/p>\n\n\n\n \u201cThe continent continues to offer up new frontiers, all of which may draw exploration capital,\u201d our Outlook report notes. \u201cPlaces to keep an eye on are the ultra-deepwater portion of the Congo Fan in Angola, the Gabon\u2013Douala Deep Sea Basin offshore S\u00e3o Tom\u00e9 and Pr\u00edncipe, the Namibe Basin in Namibia and Angola, the Herodotus Basin offshore Egypt and the offshore portion of the Sirte Basin.<\/p>\n\n\n\n \u201cOthers that have already played host to exploration cycles may still present significant opportunities in a similar fashion to the C\u00f4te d\u2019Ivoire\u2013Tano Basin. One example is the MSGBC Basin, where over 9.5 Bboe was discovered between 2014 and 2019, but which is still viewed as immature in terms of exploration.\u201d<\/p>\n\n\n\n Still, prospects alone are not enough. To translate discoveries into development, Africa must confront the operational and investment challenges that stand in the way.<\/p>\n\n\n\n Data, Imaging, and a New Era of African Prospecting<\/strong><\/p>\n\n\n\n As encouraging as the upstream outlook is, Africa\u2019s geology remains complex, and that complexity can shape how and where companies invest. In parts of West Africa, for example, thick layers of salt can distort seismic signals and make it difficult to identify potential reservoirs with confidence. And in the far south, strong offshore currents can interfere with seismic acquisition itself, degrading data quality and forcing operators to invest in more advanced imaging and noise-reduction technologies.<\/p>\n\n\n\n But as our Outlook report notes, technology is starting to change these dynamics. \u201cRecent advancements in seismic acquisition, processing technologies, and drilling capabilities have enabled exploration efforts over the past decade to target more intricate prospects at greater depths in Africa as elsewhere,\u201d it states.<\/p>\n\n\n\n These advances have been helping oil and gas companies de-risk prospects once considered too complex or too costly to pursue.<\/p>\n\n\n\n Emmanuelle Garinet, TotalEnergies\u2019 vice president for exploration in Africa, has pointed to Namibia as a prime example of how high-resolution seismic imaging and advanced subsurface modeling can reshape exploration strategies. She noted that the company\u2019s decision to drill the Venus prospect \u2014 which lies within the Namibian portion of the Orange Sub-Basin \u2014 was possible because the technical data provided enough confidence to reduce uncertainty ahead of drilling. The results validated that choice: the 2022 Venus-1 discovery, estimated at 1.5 to 2 billion barrels of recoverable oil, stands as the largest ever made in sub-Saharan Africa. Its scale has reshaped expectations for what may still be unlocked across the Orange Sub-Basin.<\/p>\n\n\n\n The trend is also visible offshore Angola, where better subsurface imaging and advanced drilling systems are opening deepwater and ultra-deepwater opportunities in heavily salt-influenced geology. Azule Energy aims to drill the Kianda prospect in late 2025. If the ultra-deepwater test succeeds, it could pave the way for exploration across a vast area \u2014 more than 30,000 square kilometers \u2014 previously viewed as high risk.<\/p>\n\n\n\n The Capital Challenge: Competing for Global Investment<\/strong><\/p>\n\n\n\n But geological complexity isn\u2019t the only factor shaping investment decisions. Political and security challenges persist in several countries \u2014 among them Nigeria, Mozambique, and the Democratic Republic of the Congo \u2014 and can materially affect both operations and capital flows. Add to that the lack of clarity around monetization and industrialization pathways, and it becomes clear why some investors remain cautious.<\/p>\n\n\n\n The Outlook report notes that upstream capital spending in Africa has risen consistently over the past three years as the sector recovers from the pandemic-related lows of 2020. Even so, worldwide investment growth has not kept pace with the strong cash flows generated by upstream operations. Analysts from firms like Wood Mackenzie and Deloitte all describe the same pattern: Companies are channeling a significant share of their cash flow into dividends, buybacks, and debt reduction instead of chasing growth at any cost.<\/p>\n\n\n\n In short, Africa is competing for capital at a time when global investors are more disciplined than ever.<\/p>\n\n\n\n In this environment, African states cannot simply assume that interest in our geology will translate into final investment decisions. We must move quickly to capitalize on today\u2019s E&P appetite by reducing above-ground risks, providing clear monetization and industrialization pathways, and building stable, predictable frameworks that give investors the confidence to commit for the long term.<\/p>\n\n\n\n The window of opportunity is open, but it will not stay open forever.<\/a><\/p>\n","protected":false},"excerpt":{"rendered":"