Report: Global Upstream Oil Capital Expenditure to Hit $504bn in 2026

Emmanuel Addeh in Abuja

Global Exploration and Production (E&P) Capital Expenditure (CAPEX) has been projected to reach $504 billion by 2026, with Africa contributing about $41 billion, driven by spending in offshore prospects, including in Mozambique, Nigeria and Angola.

Besides, Africa’s oil and gas production is expected to reach 11.4 million barrels of oil equivalent per day (MMboe/d) by 2026, with Nigeria at the forefront in terms of remaining recoverable resources, mainly located in the Niger Delta region.

This was disclosed in the latest ‘State of African Energy 2026 Outlook Report’ released by the African Energy Chamber (AEC).

However, the report stated that growing production will depend on a number of factors, including access to opportunities, sub-surface success and the ability of host governments to adjust terms and conditions to changing investor appetites.

“African investors may benefit from the global rig market’s surplus capacity and declining rates, as low day rates are projected to persist through 2027, potentially helping move a raft of projects forward depending on project economics, contractual terms and risk.

“As explorers look to make needle moving discoveries, Africa’s abundance of immature and frontier basins are increasingly attracting exploration drilling with potentially game-changing high impact wells…,”  the report added.

According to the AEC report, ongoing and planned licensing rounds across Africa provide significant opportunities for foreign investors over the coming year, offering onshore and offshore acreage in both mature and frontier basins. 

As part of renewed efforts to attract investment, the trend toward more favourable terms , it said, will continue, both through targeted incentives as well as broadly revised contract terms.

The report stated that in the first half of 2025, global upstream Mergers and Acquisitions (M&A) reached $51 billion, with Africa’s deals totalling $2.7 billion, notably including Vitol Group’s $1.65 billion acquisition of Eni assets in Côte d’Ivoire and the Republic of Congo.

That trend, it said, reflects the divestment of major oil companies from mature assets into markets with significant upside, allow-ing independent African producers to acquire these as-sets and grow their portfolios.

Stressing that above-ground risks to E&P in Africa vary from political change and activism to insecurity and shifting investor landscapes, it said that host governments are generally offering improved regulatory and contractual frameworks to promote new investment, often coinciding with the re-lease of blocks via bid rounds. “Algeria, Angola, Nigeria and Libya are amongst those to have taken this approach,” the report emphasised.

In the same vein, it stated that 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 per cent increase.

The report pointed out that producing nations such as Nigeria, Angola, and Libya are expected to attract a significant share of these investments, driven by their substantial hydrocarbon reserves and established production infrastructure. 

While onshore spending will remain stable at around $22 billion in 2026, offshore investment, according to the report, is expected to surge to $19 billion next year and grow at a 6.6 per cent compound annual growth rate through the forecast period.