Africa’s upstream oil and gas investment fell to $37 billion in 2025 from $68 billion in 2016, with Nigeria and four other major producers accounting for most of the continent’s investment and production.
This is according to the International Energy Agency (IEA) in its 2026 World Energy Investment report.
The agency said Algeria, Angola, Egypt, Nigeria and Libya have dominated the sector in the period under review.
What the IEA is saying
The agency said investment remains heavily concentrated among five major producers, even as spending in these markets has declined.
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- “Investment in the region remains highly concentrated with five countries – Algeria, Angola, Egypt, Nigeria and Libya – accounting for 70% of investment and 80% of production. However, total investment across these producers has halved from USD 50 billion in 2016 to USD 25 billion in 2025, despite an increase in Libya, reflecting shifts in investment competitiveness.”
The agency noted that exploration capital expenditure reached almost $6.5 billion in 2025, reflecting continued activity around recent discoveries.
National oil companies accounted for about one-quarter of total upstream capital expenditure, while private and international oil companies remained the primary drivers of investment, the report stated.
The IEA said the decline highlights changes in investment competitiveness across Africa’s established oil and gas producers.
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The IEA said Africa’s upstream sector continues to face challenges in attracting and financing new oil and gas projects, with exploration remaining inherently risky given the global commercial success rate of 27%.
- “Exploration capex in Africa reached almost USD 6.5 billion in 2025 reflecting ongoing work across recent discoveries. Given that the average global rate of commercial success is 27%, exploration is inherently risky, with national oil companies (NOCs) taking on a greater role,” the IEA noted
The agency noted that national oil companies are taking on a greater role in exploration, although constrained government budgets in some producer countries could limit their ability to finance upstream investment.
As a result, the agency noted partnerships and alternative financing arrangements are becoming increasingly important, with Mozambique and Senegal cited as examples.
The IEA also said private and international oil companies remain the main drivers of upstream spending, reflecting the sector’s continued reliance on external capital, technology and project execution capacity.
Nigerian context
Nigeria has recently highlighted reforms aimed at improving investment in its upstream oil and gas sector.
The Nigerian Upstream Petroleum Regulatory Commission (NUPRC) said the reforms have unlocked more than $10 billion in upstream oil and gas investment.
The reforms, according to the regulator, are anchored on the Petroleum Industry Act (PIA), which was signed into law in 2021 to overhaul Nigeria’s oil and gas sector.
- The PIA seeks to improve transparency, attract investment, strengthen governance and increase government revenue.
- The NUPRC noted that related Executive Orders were introduced to streamline approvals and improve fiscal terms.
- The NUPRC said the reforms have supported projects including Bonga North, Ubeta and the HI development through improved fiscal clarity, streamlined licensing and faster approval processes.
The developments come as Africa’s upstream sector faces declining investment despite its significant contribution to global oil and gas production.
What you should know
Recently, Nairametrics reported that thirty-one companies emerged winners of 37 oil and gas blocks following a competitive bidding process under Nigeria’s 2025 Licensing Round.
In April, Nairametrics reported that the NUPRC disclosed that Nigeria’s crude oil production increased by about 40.5 per cent to 1.84 million barrels per day (bpd), signalling a strong recovery in output.
The figure follows a production level of 1.459 million bpd recorded in January 2026, which later declined sharply to 1.31 million bpd in February.
