- African mergers and acquisitions will drive investor-friendly licensing rounds and create new opportunities for both indigenous and international players in the oil and gas industry, according to the African Energy Chamber’s 2026 Outlook.
- In Africa, the M&A landscape is evolving rapidly. Global independent oil companies are divesting mature assets, creating space for local and regional players to expand.
- Globally, upstream mergers and acquisitions totaled $51 billion between January and June 2025, down from the July to December 2024 period.
Africa’s M&A activity in the upstream oil and gas sector will enter a dynamic phase in 2026 as emerging trends continue to reshape the continent’s energy industry, which is rapidly evolving into a new frontier for investors worldwide.
According to the African Energy Chamber’s State of African Energy 2026 Outlook, African M&A activity in the coming year will be anchored by strategic realignments between global independents, international oil companies and indigenous players, in addition to a wave of licensing rounds offering new opportunities in both mature and frontier basins.
These developments and other emerging trends within the sector will be a key focus at next year’s African Energy Week (AEW) forum, where stakeholders are expected to explore how corporate transactions and licensing strategies are redefining Africa’s upstream sector.
Potential in African mergers and acquisitions in the oil and gas sector
Globally, upstream mergers and acquisitions totaled $51 billion between January and June 2025, down from the period between July and December 2024. Market volatility, financial uncertainty and US trade measures have prompted companies to take a more cautious approach, with dealmaking down significantly, especially in North America.
Internationally, deal volumes increased slightly but remained below historical norms, with business combinations driving transaction values while sales of standalone assets slowed. Upstream companies are increasingly prioritizing capital return to shareholders, focusing on add-on deals, joint exploration and development within their core regions.
In Africa, the M&A landscape is evolving rapidly. Global independent oil companies are divesting mature assets, creating space for local and regional players to expand. Over the past decade, Nigerian independents including Seplat, Oando, First E&P, Amni, Conoil, Newcross, Aiteo, Neconde and Shoreline have used auctions and corporate takeovers to build significant portfolios.
The trend continued into 2024 and early 2025, with several high-profile divestments reshaping Nigeria’s upstream sector. Notable transactions include ExxonMobil’s sale of a 30 percent managed interest in Mobil Producing Nigeria Unlimited to Seplat Energy, Eni’s transfer of its onshore E&P subsidiary to Oando, and the divestment of the Nigerian assets of TotalEnergies and Equinor ASA to Chappal Energies Offshore.
March 2025 marked another milestone with Shell’s sale of its subsidiary, Shell Petroleum Development Company of Nigeria Ltd, to Renaissance, a consortium of five mainly indigenous Nigerian E&P companies. These deals highlight the growing role of local players in onshore operations, while international players maintain a strategic presence in deepwater fields. Shell’s FID for the Bonga North deepwater project underlines renewed investor confidence, supported by the Nigerian Petroleum Industry Act and streamlined divestment approvals.
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IInternational trading companies are also reshaping their portfolios
Elsewhere in Africa, international trading companies are also reshaping their portfolios. Vitol’s $1.65 billion acquisition of Eni assets in Côte d’Ivoire and the Republic of Congo strengthens its African footprint while securing LNG supplies and trade synergies. Eni’s divestments, part of a dual exploration model, retains operatorship while monetizing minority stakes to finance energy transition initiatives. Similarly, Shell’s acquisition of TotalEnergies’ 12.5 percent stake in Nigeria’s Bonga field for $510 million reflects its focus on high-return projects and supports global production targets.
Licensing rounds across Africa are further fueling the M&A pipeline. Despite delays in Angola, Congo, Sierra Leone and Tanzania, there was significant activity in Algeria and Libya in early 2025. Algeria’s first round of bidding in a decade awarded five of the six blocks, offering both new production sharing terms and improved royalty/tax arrangements.
Libya’s first licensing round in 17 years, covering 22 blocs, introduced revised budget conditions aimed at attracting investment. These developments indicate a continued trend towards investor-friendly contracts across the continent, creating opportunities for both frontier producers and mature producers.
“Africa’s oil and gas sector will undergo significant consolidation in 2026, especially among mid-sized and African independent companies. This trend is driven by the desire for a more efficient and competitive environment, which will ultimately benefit both the continent and the industry in the long term,” said NJ Ayuk, Executive Chairman of the African Energy Chamber.
He adds that while cash remains the primary currency for most deals in Africa, an interesting development is the increasing use of stock-for-stock swaps. “The current environment in Africa’s oil and gas sector may be characterized by an ‘eat or be eaten’ mentality, with many companies prepared to be aggressive and opportunistic in 2026 as momentum builds.”
Oil and gas mergers and acquisitions and licensing trends
AEW 2026, designed to bring together industry leaders, policymakers and investors, will serve as a crucial forum for discussing these M&A and licensing trends. Delegates can expect in-depth sessions on the strategic implications of asset divestments, the rise of indigenous operators and the impact of evolving licensing frameworks.
With Africa’s upstream sector attracting increasing interest from international investors and regional players, AEW 2026 is positioned to highlight the continent’s growing role in global energy markets and the opportunities arising from ongoing business realignments.
Also read: Global oil and gas heavyweights meet in Scotland to shape Africa’s energy future
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