The African Energy Chamber’s State of African Energy 2025 Outlook Report forecasts that $43 billion will be spent on oil and gas projects across Africa in 2025. This reflects a strong investment trend, with West and North Africa leading the way. Onshore natural gas projects are expected to dominate, setting the stage for key discussions at the upcoming African Energy Week later this year.
According to the report, investment in the sector remains robust, with total capital expenditure (CapEx) for 2025 estimated at $43 billion. Long-term projections suggest this will increase to $54 billion by 2030, solidifying Africa’s role as a crucial player in the global energy market.
The report highlights that West and North Africa are driving the bulk of the investment, with West Africa alone accounting for more than 50% of the continent’s CapEx from 2023 through the decade. Established oil producers like Nigeria and Angola remain dominant, while emerging players such as Mauritania and Senegal are seeing a surge in investment.
Africa’s vast reserves of liquid hydrocarbons continue to attract the majority of investment, making up over 60% of total hydrocarbon investment through 2030. However, natural gas is gaining ground, with its share of CapEx projected to rise to 40% by the end of the decade.
Onshore projects are expected to capture the most investment, with 56% of total CapEx directed toward them by 2030. This shift is driven by lower unit costs and growing interest in monetizing onshore natural gas. This trend is also reflected in drilling activity, with onshore drilling expected to make up 80% of the 1,060 wells drilled in 2024. Meanwhile, offshore rig demand is on the rise, expected to reach 46 rig years in 2025.
Exploration activity is also ramping up. In 2024, over 150 wells were completed, with Namibia’s Orange Basin in Southern Africa seeing significant exploration activity. Africa is emerging as a global leader in high-impact drilling, with exploration spending surpassing $6 billion in 2024, largely fueled by major discoveries in Namibia and continued investment in North and West Africa.
This momentum is expected to continue, with multiple licensing rounds planned across the continent. Countries such as Nigeria, Angola, Republic of Congo, Libya, Algeria, Tanzania, and Liberia are opening up new blocks for development. In December 2024, the Nigerian Upstream Petroleum Regulatory Commission (NUPRC) completed the 2022/23 mini bid and Nigeria 2024 Licensing Round, awarding 25 oil blocks to successful bidders. NUPRC CEO, Gbenga Komolafe, is expected to continue driving investment in Nigeria’s oil and gas sector.
The report also notes that Africa’s mergers and acquisitions (M&A) landscape remains dynamic. After a strong rebound in 2024, global energy majors are continuing to rationalize their portfolios, with regional players and national oil companies (NOCs) taking a larger role. These companies are acquiring assets from majors and expanding their presence in key markets such as Angola and Nigeria. West Africa remains the leader in M&A activity in terms of deal value, followed closely by North Africa.