Africa’s Upstream Future: Momentum builds, but investment discipline remains a hurdle

By NJ Ayuk

CAPE TOWN, January 6, 2026 — Two breakthrough offshore discoveries in Namibia in 2022 — one by Shell and one by TotalEnergies — marked an important milestone for the country’s future energy landscape and for Africa’s broader upstream ambitions.

The excitement generated by high-impact discoveries creates a ripple effect that benefits the entire continent. I’m convinced that the ongoing interest we’re seeing today in African exploration and production [E&P] stems in part from the major discoveries in Namibia, alongside recent successes in Côte d’Ivoire, Angola, and Egypt.

When you factor in advances in E&P technology, the promise of newly emerging basins, and the continued strength of Africa’s established producing regions, there are genuine reasons to feel confident about the future of African oil and gas.

That sentiment is reflected in the African Energy Chamber’s 2026 Outlook Report, “The State of African Energy,” which projects renewed momentum in the continent’s upstream market during the next several years. According to the report, global E&P capital expenditure [capex] is forecast to reach approximately US$ 504 billion by 2026, with Africa contributing about US$ 41 billion.

Africa’s 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.

Yes, the report acknowledges that optimism is being tempered by caution. Keen to protect their balance sheets, investors are scrutinising 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.

Frontier and emerging basins signal strong new potential

As investors weigh their options, the most compelling signs of progress are coming from Africa’s frontier and emerging basins.

In Namibia’s 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. Côte d’Ivoire, meanwhile, is seeing a surge of activity around its recent deepwater finds.

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.

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.

“The continent continues to offer up new frontiers, all of which may draw exploration capital,” our Outlook report notes. “Places to keep an eye on are the ultra-deepwater portion of the Congo Fan in Angola, the Gabon–Douala Deep Sea Basin offshore São Tomé and Príncipe, the Namibe Basin in Namibia and Angola, the Herodotus Basin offshore Egypt and the offshore portion of the Sirte Basin.

“Others that have already played host to exploration cycles may still present significant opportunities in a similar fashion to the Côte d’Ivoire–Tano 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.”

Still, prospects alone are not enough. To translate discoveries into development, Africa must confront the operational and investment challenges that stand in the way.

Data, imaging, and a new era of African prospecting

As encouraging as the upstream outlook is, Africa’s 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.

But as our Outlook report notes, technology is starting to change these dynamics. “Recent 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,” it states.

These advances have been helping oil and gas companies de-risk prospects once considered too complex or too costly to pursue.

Emmanuelle Garinet, TotalEnergies’ 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’s decision to drill the Venus prospect — which lies within the Namibian portion of the Orange Sub-Basin — 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.

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 — more than 30,000 square kilometers — previously viewed as high risk.

The Capital challenge: Competing for global investment

But geological complexity isn’t the only factor shaping investment decisions. Political and security challenges persist in several countries — among them Nigeria, Mozambique, and the Democratic Republic of the Congo — 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.

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.

In short, Africa is competing for capital at a time when global investors are more disciplined than ever.

In this environment, African states cannot simply assume that interest in our geology will translate into final investment decisions. We must move quickly to capitalise on today’s 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.

The window of opportunity is open, but it will not stay open forever.

The writer is the Chairman of African Energy Chamber.