Africa’s oil and gas sector is gearing up for a transformative year in 2026, with mergers and acquisitions (M&A) expected to surge across the continent. According to the African Energy Chamber’s State of African Energy 2026 Outlook, renewed licensing rounds and strategic portfolio realignments among international oil companies (IOCs), independents, and indigenous operators are reshaping Africa’s upstream landscape.
These dynamics will take centre stage at next year’s African Energy Week (AEW) 2026, where industry leaders will explore how corporate transactions and evolving licensing strategies are redefining the future of African energy.
Globally, upstream M&A activity totalled $51 billion in the first half of 2025, a decline compared to late 2024. Market volatility, financial headwinds, and new U.S. trade measures have prompted companies to act cautiously, leading to a sharp slowdown in deal-making across North America. Although international transaction volumes edged up slightly, they remain below historical levels, with corporate combinations driving deal values as standalone asset sales fell.
Oil and gas companies are increasingly focused on capital discipline and shareholder returns, pursuing bolt-on acquisitions, joint exploration ventures, and targeted developments within core regions rather than broad-scale expansion.
African Independents Take the Lead
Across Africa, the M&A landscape is evolving rapidly as global independents divest mature assets, opening doors for local and regional players. Over the past decade, Nigerian independents such as Seplat, Oando, First E&P, Amni, Conoil, Newcross, Aiteo, Neconde, and Shoreline have leveraged divestments and auctions to expand their portfolios significantly.
This trend accelerated in 2024 and early 2025 with several landmark transactions reshaping Nigeria’s upstream sector. Notable deals include
- ExxonMobil’s sale of a 30% operated interest in Mobil Producing Nigeria Unlimited to Seplat Energy;
- Eni’s transfer of its onshore subsidiary to Oando; and
- TotalEnergies and Equinor ASA’s divestment of Nigerian assets to Chappal Energies Offshore.
In March 2025, Shell completed the sale of its subsidiary, Shell Petroleum Development Company of Nigeria Ltd, to Renaissance – a consortium of five largely indigenous Nigerian exploration and production firms. These transactions highlight the rising influence of local operators in onshore oil and gas, while IOCs maintain a strategic foothold in deepwater assets.
Shell’s final investment decision (FID) on the Bonga North deepwater project underscores renewed investor confidence, bolstered by Nigeria’s Petroleum Industry Act and improved regulatory clarity on divestments.
Portfolio Realignments Across the Continent
Elsewhere, international trading houses are also repositioning. Vitol’s $1.65 billion acquisition of Eni’s assets in Côte d’Ivoire and the Republic of Congo strengthens its African presence while securing LNG supply and trading synergies.
For Eni, these divestments are part of a dual exploration model – retaining operatorship while monetising minority stakes to fund energy transition projects. Similarly, Shell’s $510 million purchase of TotalEnergies’ 12.5% stake in Nigeria’s Bonga field aligns with its focus on high-return assets and supports global production targets.
Licensing Rounds Fuel M&A Momentum
New licensing rounds are set to further stimulate deal activity across Africa. While delays persisted in Angola, Congo, Sierra Leone and Tanzania, 2025 saw major progress in Algeria and Libya.
Algeria’s first bid round in a decade awarded five out of six blocks, featuring improved production-sharing terms and more attractive fiscal frameworks. Meanwhile, Libya’s first licensing round in 17 years, covering 22 blocks, introduced revised fiscal conditions to lure investors back.
These reforms mark a continental shift towards investor-friendly regimes, opening new opportunities for both mature producers and frontier explorers.
Industry Consolidation on the Horizon
“The African oil and gas sector is set for significant consolidation in 2026, particularly among midsize and African independent companies. This trend is driven by a desire for a more efficient and competitive environment, which is ultimately beneficial for both the continent and the industry in the long term,” said NJ Ayuk, Executive Chairman of the African Energy Chamber.
He added that while cash remains the primary medium for most deals in Africa, an increasing number of transactions are now being structured as stock-for-stock swaps.
“The current climate in African oil and gas can be characterised by an ‘eat or be eaten’ mentality, with many companies prepared to be aggressive and opportunistic in 2026 as momentum builds,” Ayuk noted.
AEW 2026: Shaping the Future of African Energy
Set to convene in 2026, African Energy Week will bring together policymakers, investors, and industry leaders for in-depth discussions on the continent’s M&A and licensing trends. The event will explore the strategic implications of divestments, the rise of indigenous operators, and the impact of evolving fiscal frameworks.
With Africa’s upstream sector drawing growing attention from global and regional investors alike, AEW 2026 is poised to underscore the continent’s expanding influence in global energy markets and the wealth of opportunities emerging from ongoing corporate realignments and regulatory reforms.
No comments:
Post a Comment