Africa’s oil and gas industry is entering a new investment cycle. But unlike previous periods of enthusiasm, the continent’s opportunity is increasingly less about discovering another large reserve and more about determining whether existing and newly developed resources can be converted into energy security, industrial capacity and long-term economic value.
Upstream oil and gas investment in Africa is expected to reach approximately $41 billion in 2026, up from around $40 billion in 2025, according to industry estimates. Production is also expected to stabilise at approximately 11.4 million barrels of oil equivalent per day, with deepwater developments emerging as an important source of future supply.
This investment is significant because Africa remains one of the world’s most underdeveloped energy markets despite possessing substantial hydrocarbon resources. The continent is simultaneously an exporter of crude oil and natural gas and a major importer of refined petroleum products and, in some markets, electricity.
For decades, many African economies have focused on extracting hydrocarbons and exporting them, while importing a significant proportion of the refined products and industrial goods required by their domestic economies. The result has often been limited local value addition and insufficient industrial linkages.
The next investment cycle presents an opportunity to change this.
Deepwater developments are particularly important. New projects across countries including Namibia, Angola and Nigeria are expected to contribute to future production, while offshore exploration continues to attract international energy companies. Africa is also expected to account for a significant share of global high-impact exploration activity in 2026, reflecting renewed interest in frontier basins. But production alone should not be considered the measure of success.
The more consequential question is what happens after the oil and gas comes out of the ground. For natural gas in particular, African governments are increasingly looking beyond exports towards domestic utilisation. Gas can provide feedstock for fertiliser production, power generation, petrochemicals and industrial manufacturing. In countries with unreliable electricity supply, greater access to domestic gas could also support industrialisation by providing more dependable power.
Mauritania provides one example of this direction. The country is advancing the $669 million N’Diago gas-to-power project, which is expected to establish its first gas pipeline network and increase domestic utilisation of natural gas.
This is where Africa’s oil and gas strategy becomes a development question rather than simply an energy question.
Nigeria, for example, is pursuing greater gas monetisation alongside LNG expansion and domestic utilisation. Its 2026 gas master plan targets additional supply as the country seeks to increase production capacity and attract substantial investment across the gas value chain.
The logic is straightforward: hydrocarbons become considerably more valuable to an economy when they support industries beyond extraction.
A barrel of crude exported without domestic processing generates one economic stream. That same resource, connected to refineries, petrochemical plants, logistics networks, engineering services and manufacturing, can support an entire industrial ecosystem.
This is particularly relevant as the global energy system changes. Africa cannot assume that oil and gas will remain the dominant source of economic growth indefinitely. At the same time, the continent cannot afford to ignore resources that can help address its immediate energy and development challenges.
The challenge is therefore one of sequencing. African countries need to use the remaining period of strong hydrocarbon investment to build infrastructure, strengthen domestic energy systems, develop technical skills and establish industries capable of surviving beyond the commodity cycle.
There is also a governance challenge. Attracting billions of dollars in foreign investment is only the first step. Governments need fiscal and regulatory frameworks that provide investors with sufficient certainty while ensuring that host economies capture meaningful economic benefits.
Local-content policies, infrastructure development, technology transfer and partnerships with domestic companies will become increasingly important.
Ultimately, Africa’s next oil and gas boom should not be judged by how many barrels are produced or how many exploration licences are awarded. It should be judged by whether those resources help African economies produce more electricity, manufacture more goods, develop stronger supply chains and create productive employment.
The continent may have another significant hydrocarbon investment window ahead. The opportunity is to ensure that this one produces more than oil and gas.
It must produce industrial capacity.
Written by:
*Chloe Maluleke
Associate at BRICS+ Consulting Group
Russia & Middle East Specialist
**The Views expressed do not necessarily reflect the views of Independent Media or IOL.
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