IEA: Five African nations dominate oil investment as funding slumps

By Abubakar Yunus

The International Energy Agency has revealed that upstream oil and gas investment in Africa remains heavily concentrated in five countries—Nigeria, Algeria, Angola, Egypt and Libya—even as overall funding across the continent continues to decline.
The agency disclosed this in its 2026 World Energy Investment Report, published on Tuesday, noting that the five producers account for 70 per cent of Africa’s upstream oil and gas investment and 80 per cent of the continent’s production.
According to the report, upstream investment across Africa fell sharply to $37bn in 2025, down from $68bn in 2016, highlighting growing concerns over the continent’s competitiveness in attracting energy investments.
The IEA said, “Investment in the region remains highly concentrated with five countries – Algeria, Angola, Egypt, Nigeria and Libya – accounting for 70% of investment and 80% of production.”
It added that despite Libya recording increased investment, total capital flowing into the five leading producers had dropped by half, falling from $50bn in 2016 to $25bn in 2025.
The agency attributed the decline to changing investment competitiveness and reduced opportunities in mature oil-producing assets.
However, the report noted that emerging producers such as Mozambique, Namibia, Senegal and Uganda are attracting growing investor interest.
According to the IEA, investment in the four countries climbed from $1.5bn in 2016 to $5bn in 2025, despite their relatively low production levels.
The agency explained that the increase was driven by the development of new capital-intensive projects, including deepwater exploration and liquefied natural gas terminals.
It said, “Exploration capex in Africa reached almost USD 6.5 billion in 2025 reflecting ongoing work across recent discoveries.”
The IEA warned that oil exploration remained a high-risk venture, with national oil companies increasingly taking on larger responsibilities despite limited financial capacity.
It noted that budget constraints across several producing countries have forced national oil companies to depend more on partnerships and alternative financing arrangements, citing Mozambique and Senegal as examples.
The report further stated that private and international oil companies remain the dominant drivers of upstream investment across Africa, reflecting the continent’s continued dependence on foreign capital, technology and project execution expertise.
National oil companies, it added, account for only about one-quarter of total upstream capital expenditure.
Looking ahead, the IEA projected that upstream investment in sub-Saharan Africa would rebound by 12 per cent to about $24bn in 2026, after recording an 18 per cent year-on-year decline in 2025.
The agency said energy giant BP would focus its 2026 investments on expanding production in Angola and Namibia’s Orange Basin through the Azule Energy joint venture.
It also identified Nigeria as one of the countries expected to benefit from continued investments in LNG development and deepwater oil projects.
“LNG supply development continues in both Nigeria and Mozambique by a variety of majors and local companies,” the report stated, adding that Nigeria was also advancing deepwater developments through partnerships with international oil majors.