The potential of Africa’s upstream sector remains one of the most interesting topics for the industry to consider as we think about where future supplies might come from.
Wood Mackenzie estimates in a November research note that only about one-third of Africa’s discovered hydrocarbon resources have been commercialized. While the current level of activity is expected to generate roughly $109 billion per year in government revenues, the untapped resource base underscores how much is being left on the table.
Wood Mackenzie lists some familiar challenges to moving the needle forward on upstream investments. They include governance and regulatory frameworks, along with small domestic gas markets. There are, however, several countries trying to work through some of these issues.
Wood Mackenzie points to Nigeria, Africa’s largest oil producer, which has set targets to double current crude output to 3 million B/D while increasing gas production to 12 Bcf/D by 2030. The consultancy suggested in a separate note last year that Nigeria’s new tax credits will help the effort, describing them as “decisive” in securing the sanctioning of Shell’s Bonga North project, the first deepwater development approved offshore Nigeria in more than a decade.
Angola, currently producing about 1 million B/D, exited OPEC in 2024 in a move meant to simultaneously free itself from production quotas and boost output.
Wood Mackenzie said the strategy in Angola has been to incentivize infill and subsea tieback opportunities by lowering royalties and taxes while bumping up cost recovery allowances. The policy reform may soon bear fruit as TotalEnergies moves forward with a $6-billion deepwater oil project, and other projects are set to increase gas output 18% by 2030.
Combined with revised fiscal terms in both countries, these ambitions could help attract around $20 billion in upstream investment, according to Wood Mackenzie.
The African Energy Chamber (AEC) recently released its 2026 Outlook Report with data from S&P Global that offers the industry another look at where things may be headed.
Africa’s hydrocarbon output this year is projected at 11.4 million BOE/D, split between roughly 37% gas and 63% liquids, which puts crude and condensate output at around 7.1 million B/D. While output is considered broadly stable in the near term, new projects in Côte d’Ivoire, Mozambique, Namibia, and Uganda are expected to lift volumes to about 13.6 million BOE/D by 2030.
The AEC report also highlights a notable increase in domestic demand that is on the horizon. Africa represents about 19% of the global population but accounts for only 5% of global oil-product consumption. This imbalance is expected to narrow over the coming decades as both population and economic activity accelerate.
The AEC cites projections showing Africa’s gross domestic product nearly tripling by 2050 to reach $7.8 trillion, while the population climbs by another 930 million people, reaching 2.4 billion, or one quarter of the world’s total.
These drivers are predicted to push refined-product demand from about 4 million B/D in 2024 to more than 6 million B/D by 2050. The gap between demand and domestic refining capacity remains wide, and the report estimated that more than $20 billion in downstream investment will be required by mid-century to improve supply security and reduce Africa’s reliance on imports.
As Africa looks to the future, Nigeria holds what is perhaps the greatest potential with the continent’s largest recoverable oil reserves of an estimated 24.4 billion bbl. Libya follows with 14.2 billion bbl, and Algeria holds about 13.5 billion bbl. On the gas side, Mozambique stands out with roughly 124 Tcf, ahead of Nigeria’s 108 Tcf and Algeria’s 91.5 Tcf.
The AEC report notes that 39 high-impact wells have been drilled across Africa since 2021. These targets are defined by their potential to deliver more than 250,000 BOE/D. With 95% of these wells drilled in frontier and immature areas, they are also often considered “play openers” that hold the potential to prove out a specific geological zone.
The most promising of the recent high-impact wells come from the Namibian side of the Orange sub-basin, where the technical success of exploration wells has reached 60%. This compares to a 16% success rate across the rest of the continent where high-impact wells have been drilled in the past few years.
According to the AEC, the campaigns in Namibia’s deepwater and ultradeepwater fields have found 6 billion BOE of potential resource and early exploration efforts have moved “at a pace comparable to that of Guyana.”
Major players including TotalEnergies and Shell are leading the charge, though the report acknowledges setbacks such as Shell’s recent $400-million write-down on a noncommercial well offshore Namibia.
To the east, Uganda has become another notable newcomer to Africa’s upstream market. The country is in the final stages of developing an export pipeline tied to the Lake Albert development, which is expected to peak at 230,000 B/D by 2028. Operated by TotalEnergies with minority partners CNOOC and the Uganda National Oil Company, the development is paired with plans for a 60,000 B/D refinery, with an initial 30,000 B/D phase targeted for completion in 2028, if financing is secured.
In North Africa, the biggest contributors to the upstream picture remain Algeria, Egypt, and Libya.
Algeria is the top producer of these three at about 3.3 million BOE/D, which is split almost evenly between liquids and gas output. Much of the country’s exploration efforts are focused on small but commercially viable prospects near existing fields and 14 discoveries were announced in 2024. Algeria’s national oil company Sonatrach represents over 75% of liquids and more than 80% of Algeria’s gas production.
Although the country is looking at a handful of new developments in the coming years, output is expected to remain relatively flat for the rest of the decade at about 3 million BOE/D. Algeria may boost its prospects, however, with outside help after the country held a licensing round in 2025, its first in about 10 years, with five of six blocks awarded.
Egypt is considered to hold more frontier potential, the AEC said while noting an offshore gas discovery by ExxonMobil in 2025 in the North Marakia block. The wildcat well may have uncovered 3 to 4 Tcf in gas reserves, but the AEC said the find is “facing challenges with commerciality despite the fact that it represents a promising play and a basin opener.” The upside is that the basin is 78,000 km2 and has only been tested with five exploration wells so far, two of which are considered a success.
One of the most anticipated shifts in Africa will involve Libya which also held licensing rounds in 2025 that attracted 40 oil and gas companies. The country offered 22 blocks split between onshore and offshore areas and included undeveloped discoveries that are estimated to hold at least 2 billion BOE. It was the country’s first open bid since 2007 and marks a sign that Libya’s upstream market is recovering from a decade of civil conflict that at times halted almost all output.
However, Libya serves as a reminder that security risks represent one of the biggest threats to Africa’s upstream potential. This was the case recently in Mozambique where a 2021 attack occurred near liquefied natural gas (LNG) projects under construction.
Even so, both cases suggest that stability can also be restored and that projects can move forward. ExxonMobil and TotalEnergies recently lifted force majeure declarations on their respective LNG megaprojects in Mozambique, a step that strengthens the country’s emerging position as one of the world’s top LNG hubs.
