Nigeria Projected To Lead Africa’s $41Bn Upstream Oil CAPEX By 2026
By Naija Enquirer Staff
Nigeria’s oil and gas sector is positioning the country to lead the African continent in upstream investment, contributing approximately $41 billion to a projected $504 billion in global Exploration and Production (E&P) capital expenditure (CAPEX) by 2026.
According to the State of African Energy 2026 Outlook Report released by the African Energy Chamber (AEC), Africa’s CAPEX growth will be driven by spending on offshore prospects in Nigeria, Mozambique, and Angola.
The report also projects Africa’s oil and gas production to reach 11.4 million barrels of oil equivalent per day (MMboe/d) by 2026, with Nigeria leading in remaining recoverable resources, largely concentrated in the Niger Delta region.
The AEC noted that sustained production growth will depend on factors including access to opportunities, sub-surface success, and host governments’ ability to adjust terms and conditions in line with investor expectations.
“African investors may benefit from the global rig market’s surplus capacity and declining rates, which are expected to persist through 2027, potentially accelerating projects depending on economics, contractual terms, and risk,” the report highlighted.
It further noted, “As explorers aim for high-impact discoveries, Africa’s abundance of immature and frontier basins is increasingly attracting exploration drilling, with the potential for game-changing wells.”
Ongoing and planned licensing rounds across Africa were identified as significant opportunities for foreign investors, offering onshore and offshore acreage in both mature and frontier basins. Renewed efforts to attract investment through favourable terms, targeted incentives, and revised contract frameworks are expected to continue.
The report highlighted that global upstream Mergers and Acquisitions (M&A) reached $51 billion in the first half of 2025, with Africa accounting for $2.7 billion, notably including Vitol Group’s $1.65 billion acquisition of Eni assets in Côte d’Ivoire and the Republic of Congo. This trend reflects divestments from mature assets by major oil companies, enabling independent African producers to acquire and expand their portfolios.
While above-ground risks—including political change, activism, insecurity, and shifting investor sentiment—remain, host governments are improving regulatory and contractual frameworks to encourage new investment, often coinciding with bid rounds. Countries such as Algeria, Angola, Nigeria, and Libya have adopted this approach, the report emphasized.
In addition, Africa’s refined product demand is projected to rise from 4 million barrels per day (bbl/d) in 2024 to over 6 million bbl/d by 2050, a 50% increase. Producing nations like Nigeria, Angola, and Libya are expected to attract a substantial share of these investments due to their hydrocarbon reserves and established infrastructure.
The report concluded that while onshore spending will remain around $22 billion in 2026, offshore investment is set to surge to $19 billion next year, growing at a 6.6% compound annual growth rate throughout the forecast period.
