Johannesburg: Two significant offshore discoveries by Shell and TotalEnergies in Namibia during 2022 have marked a pivotal moment for the country's energy future and Africa's wider upstream goals. These breakthroughs are part of a growing wave of exploration success stories across the continent, creating a ripple effect that is boosting interest in African exploration and production (E&P).
According to African Press Organization, the enthusiasm for African E&P activities is partly fuelled by these major discoveries in Namibia, as well as recent successful ventures in Côte d'Ivoire, Angola, and Egypt. With advancements in E&P technology and the promise of new basins, alongside the resilience of Africa's established producing regions, there are genuine reasons for optimism about the continent's oil and gas future.
The African Energy Chamber's 2026 Outlook Report, "The State of African Energy," underscores this optimism. It projects a renewed momentum in Africa's upstream market over the next few years. The report forecasts global E&P capital expenditure (capex) to reach around USD504 billion by 2026, with Africa contributing about USD41 billion. Africa's hydrocarbon production is expected to remain stable at approximately 11.4 million barrels of oil equivalent per day (boe/d) through 2026, with new projects potentially increasing output to 13.6 million boe/d by 2030.
While there is optimism, the report also highlights investor caution. Investors are keen to protect their balance sheets and are closely scrutinizing opportunities. Nonetheless, the potential for sustained upstream expansion remains promising for African states with petroleum reserves. The challenge lies in attracting the necessary capital to pursue the next wave of discoveries.
Africa's frontier and emerging basins are showing strong potential. In Namibia's Orange Sub-Basin, over 6 billion boe have been discovered in less than four years, preparing operators for the next wave of high-impact wells. Côte d'Ivoire is witnessing a surge in activity around its recent deepwater discoveries, and Egypt is experiencing fresh momentum in underexplored offshore areas.
The continent offers new frontiers that may attract exploration capital. Areas to watch include the ultra-deepwater portion of the Congo Fan in Angola, the Gabon-Douala Deep Sea Basin offshore São Tomé and Príncipe, the Namibe Basin in Namibia and Angola, the Herodotus Basin offshore Egypt, and the offshore portion of the Sirte Basin.
However, prospects alone are insufficient. Africa must address operational and investment challenges to translate discoveries into development. Technological advancements are aiding this effort. Recent improvements in seismic acquisition, processing technologies, and drilling capabilities have enabled exploration efforts targeting more intricate prospects at greater depths.
In Namibia, high-resolution seismic imaging and advanced subsurface modeling have reshaped exploration strategies. The 2022 Venus-1 discovery, estimated at 1.5 to 2 billion barrels of recoverable oil, highlights the potential of the Orange Sub-Basin. Offshore Angola, improved subsurface imaging and advanced drilling systems are unlocking deepwater opportunities.
Despite these advances, political and security challenges persist in several African countries, affecting operations and capital flows. The lack of clarity around monetization and industrialization pathways adds to investor caution. Although upstream capital spending in Africa has risen over the past three years, global investment growth has not matched the strong cash flows generated by upstream operations.
In this competitive environment, African states must act swiftly to capitalize on E&P interest. By reducing above-ground risks, providing clear monetization and industrialization pathways, and establishing stable, predictable frameworks, African nations can give investors the confidence to commit for the long term.