Africa has been at the mercy of the international energy market for many years, struggling to keep up with the rest of the world in advancing energy generation capacity. However, at the G20 Summit in South Africa in November last year, the African Energy Chamber urged African nations to invest more in the conventional upstream market to accelerate growth across the continent. To provide a framework for the growth ambitions of Africa’s upstream market, the AEC released its African Energy 2026 Outlook.
African nations have seen rapid growth across the upstream sector recently
At the G20 Summit, the African Energy Chamber urged nations to place the traditional upstream market at the center of their collective economic plans for the continent, as it expects the sector to grow substantially over the coming years. Officials at the AEC note that hydrocarbons will play a vital role in advancing the continent’s economic prospects for the new year.
The AEC expects the oil and gas sectors in particular to expand rapidly over the coming months, with projections of oil and gas production to reach 11.4 million bpd this year. Market instability, increased energy poverty, and a lack of investments in the sector have stagnated the progress of several African nations. South Africa’s Minister of Mineral and Petroleum Resources, Gwede Mantashe, noted the importance that the upstream market will play over the coming years.
“We have no legal restriction on oil and gas exploration and exploitation in South Africa. If we make a breakthrough, our GDP will grow exponentially.” – South Africa’s Minister of Mineral and Petroleum Resources, Gwede Mantashe
Officials noted that the projected growth of the market in Africa has attracted investments from some of the largest energy companies in the world. With several major LNG projects in Mozambique, offshore gas developments in Senegal, Mauritania, and Equatorial Guinea, industry experts have stated that the rapid growth of the market will depend on the sentiment towards African energy projects from international companies.
Several African nations have opened new bidding rounds for the market
The African Energy Chamber has noted that several new licensing rounds have been opened by a litany of nations on the continent, paving the way for a new wave of upstream developments in Africa over the coming years. The Chamber has welcomed the substantial investment made by the US in a new Mozambican LNG project, totalling an eye-watering $4.5 billion. Shell recently signed off on a new project in Nigeria, exemplifying the potential of the African market.
The African Energy Chamber’s State of African Energy 2026 Outlook calls for more investments in the continent’s upstream market as gas in particular plays a vital role on the continent, used by millions for cooking and heating. Algeria recently held a bidding round that saw five out of six new blocs being awarded to companies, while Libya also held a new bidding round for its substantial gas and oil plans for the new year.
“The African oil and gas sector is set for significant consolidation in 2026, particularly among midsize and African independent companies. This trend is driven by a desire for a more efficient and competitive environment, which is ultimately beneficial for both the continent and the industry in the long term,” – NJ Ayuk, Executive Chairman of the African Energy Chamber
Despite the rapid acceleration of renewable energy, the world needs oil and gas to increase energy capacity
Amid the calls made by several European nations to foster more investments in clean energy, Africa will rely on the projected growth of the oil and gas sector to bring in a new wave of energy possibilities in the coming years. Other energy-rich nations have similar plans to invest in the upstream market too, with ADNOC revealing its $150 billion investment roadmap for the sector last year. The evidence would suggest a new balancing act is on the cards for the market as the new year brings new expectations.
