Nigeria, four others account for 70% of Africa’s upstream oil...

Africa’s upstream oil and gas investment declined to $37 billion in 2025 from $68 billion in 2016, with Nigeria and four other major producers accounting for the bulk of the continent’s spending and production, according to the International Energy Agency (IEA).

The IEA disclosed this in its 2026 World Energy Investment Report, noting that investment across Africa remains heavily concentrated in Algeria, Angola, Egypt, Nigeria and Libya, despite an overall decline in capital flows to the sector.

According to the agency, the five countries account for about 70 per cent of upstream investment and 80 per cent of the continent’s oil and gas production.

However, combined investment across the five producers has fallen sharply over the past decade.

“Investment in the region remains highly concentrated with five countries, Algeria, Angola, Egypt, Nigeria and Libya , accounting for 70 per cent of investment and 80 per cent of production. However, total investment across these producers has halved from $50 billion in 2016 to $25 billion in 2025, despite an increase in Libya, reflecting shifts in investment competitiveness,” the report stated.

The IEA said exploration capital expenditure reached almost $6.5 billion in 2025, reflecting continued activity around recent discoveries across the continent.

It added that national oil companies accounted for roughly one-quarter of total upstream capital expenditure, while private and international oil companies continued to drive the bulk of investment through capital deployment, technology and project execution.

The report noted that Africa’s upstream industry continues to face challenges in attracting financing for new projects, with exploration remaining a high-risk activity.

“Exploration capex in Africa reached almost $6.5 billion in 2025, reflecting ongoing work across recent discoveries. Given that the average global rate of commercial success is 27 per cent, exploration is inherently risky, with national oil companies taking on a greater role,” the agency stated.

According to the IEA, constrained government finances across several producing countries could limit the ability of national oil companies to fund exploration and field development, making partnerships and alternative financing structures increasingly important.

It cited Mozambique and Senegal as examples where collaborative funding models are helping to advance upstream projects.

For Nigeria, the report comes amid renewed efforts to attract investment into the oil and gas industry through regulatory reforms introduced under the Petroleum Industry Act (PIA).

The Nigerian Upstream Petroleum Regulatory Commission (NUPRC) recently disclosed that reforms anchored on the PIA and supporting Executive Orders have unlocked more than $10 billion in upstream oil and gas investments.

According to the commission, the reforms have improved fiscal certainty, streamlined approval processes and accelerated project development, supporting investments in major projects such as Bonga North, Ubeta and the HI Development.

The PIA, signed into law in 2021, was designed to improve transparency, strengthen governance, enhance government revenue and restore investor confidence in Nigeria’s petroleum industry.

The IEA’s findings nevertheless underscore the broader challenge facing Africa’s oil-producing nations as global competition for upstream capital intensifies.

Despite the investment slowdown, Nigeria has continued to record improvements in crude oil production. The NUPRC recently reported that crude output rose by about 40.5 per cent to 1.84 million barrels per day, signalling a recovery after production fell to 1.31 million barrels per day in February 2026.

The improvement follows recent licensing activities in which 31 companies emerged successful bidders for 37 oil and gas blocks under Nigeria’s 2025 Licensing Round, as the country seeks to sustain production growth while attracting fresh investment into its upstream sector.