The Resurgence of the Oil and Gas Sector

Why Hydrocarbons Are Back at the Centre of the Energy Conversation

Executive Summary

After years of predictions about the decline of oil and gas, the global petroleum industry is entering another important phase.

This is not necessarily a return to the oil-centric energy system of previous decades. Instead, the sector is being reshaped by a combination of geopolitical tensions, energy-security concerns, rising electricity demand, industrialisation, artificial intelligence, supply-chain vulnerabilities, renewed upstream investment and the continuing need for affordable energy.

In Africa, the shift is particularly significant.

The continent possesses some of the world’s largest undeveloped hydrocarbon resources, yet many African countries continue to experience energy poverty, inadequate refining capacity, unreliable electricity and insufficient industrialisation. At the same time, international oil companies are rationalising portfolios, independent producers are acquiring assets, frontier basins are attracting exploration capital, and governments are revising fiscal and regulatory frameworks to encourage investment.

The result is a new petroleum landscape.

Nigeria is attempting to increase upstream production and monetise its enormous gas reserves. Namibia is moving from exploration success toward commercialisation. Uganda is progressing toward first oil. Mozambique remains strategically important to the global LNG market. Angola is attracting investment into mature and deepwater assets. Côte d’Ivoire is emerging as a regional growth story.

The opportunity is substantial.

But so are the risks.

The oil and gas industry now operates under greater scrutiny around emissions, methane, capital discipline, community relations, energy transition and stranded-asset risk. Companies that want to participate successfully in the next cycle will need to be more efficient, technologically sophisticated, financially disciplined and responsive to changing energy markets.

For Africa, the central question is therefore not whether oil and gas have a future.

The more important question is:

Can African countries use the resurgence of hydrocarbons to build broader, more productive and more resilient economies before the window of opportunity narrows?

1. The Oil and Gas Industry Is Entering a New Cycle

For much of the past decade, the oil and gas industry operated under considerable uncertainty.

Investors faced pressure to reduce exposure to hydrocarbons. International oil companies increasingly emphasised capital discipline and shareholder returns rather than aggressive production growth. Environmental, social and governance considerations influenced investment decisions, while expectations surrounding the energy transition encouraged investors to consider whether long-lived oil and gas projects might eventually become stranded assets.

Yet the underlying demand for hydrocarbons did not disappear.

Oil remained critical to transportation, petrochemicals, aviation, shipping and industrial activity. Natural gas remained important for electricity generation, heating, industrial processes and fertiliser production.

Then came a series of major disruptions.

The COVID-19 pandemic exposed vulnerabilities in global supply chains. Russia’s invasion of Ukraine fundamentally altered European energy security. Geopolitical tensions in the Middle East have subsequently demonstrated how vulnerable global oil and gas markets remain to disruption.

The lesson for governments and businesses has been straightforward:

Energy security has economic value.

The IEA’s 2026 investment outlook reflects this shift. Global energy investment is expected to reach a record $3.4 trillion in 2026, while energy-security concerns are influencing investment decisions across both conventional and low-carbon energy systems.

This does not represent the abandonment of the energy transition.

It represents a recognition that the global economy needs more energy, more reliable energy and a more diversified energy system.

2. Oil Demand Has Not Disappeared

One of the most important mistakes in discussing the future of oil is treating the energy transition as synonymous with the immediate disappearance of petroleum demand.

The reality is more complicated.

Oil demand is increasingly influenced by different sectors moving at different speeds.

Passenger vehicles are undergoing electrification.

But aviation remains heavily dependent on liquid fuels.

Shipping continues to require substantial quantities of energy-dense fuels.

Petrochemicals require hydrocarbons as feedstocks.

Heavy industry remains difficult to electrify completely.

Emerging economies are still expanding their consumption of mobility, manufactured goods, plastics and energy-intensive products.

This creates a more nuanced demand picture.

The IEA’s August 2026 Oil Market Report projected a 1.6 million barrel-per-day contraction in global oil demand for 2026, heavily influenced by the extraordinary disruption to energy markets and elevated prices during the year. However, the agency projected global oil demand to return to growth of 2.4 million barrels per day in 2027.

Meanwhile, OPEC’s 2026 World Oil Outlook presents a much more bullish long-term scenario, projecting global oil demand to reach 124 million barrels per day by 2050 and arguing that substantial investment will remain necessary to meet future energy requirements.

These forecasts differ significantly because they reflect different assumptions about technology, policy, economic growth and energy substitution.

That divergence itself is important.

It means businesses cannot responsibly plan around a single prediction about peak oil demand.

They must plan for multiple possible energy futures.

3. Energy Security Has Changed the Investment Conversation

Energy security has moved from being a policy consideration to becoming a boardroom issue.

For governments, insufficient energy supplies can contribute to inflation, industrial disruption and political instability.

For manufacturers, unreliable energy can make production uncompetitive.

For technology companies, insufficient electricity can constrain data-centre and AI expansion.

For transport companies, fuel shortages can disrupt logistics.

For investors, geopolitical disruption can rapidly change the economics of energy assets.

This is helping to revive interest in domestic and regional hydrocarbon resources.

The argument is not necessarily that every country should maximise oil and gas production.

Rather, countries are increasingly asking:

How much control should we have over our own energy supply?

This is especially relevant to Africa.

The continent exports substantial quantities of crude oil and natural gas while many countries remain dependent on imported refined petroleum products and struggle with electricity access.

That contradiction creates an enormous strategic opportunity.

4. Africa Is Experiencing an Upstream Resurgence

Africa’s upstream sector provides one of the clearest examples of the industry’s renewed momentum.

Wood Mackenzie expects Sub-Saharan African oil and gas output to exceed 6 million boe/d in 2026, marking a significant recovery from the production levels recorded earlier in the decade.

The resurgence is being driven by a combination of:

• New project start-ups
• Brownfield redevelopment
• Deepwater developments
• Improved operating efficiency
• New exploration
• Portfolio restructuring
• Independent producer acquisitions
• Improved regulatory frameworks
• Investment in gas and LNG
• Development of frontier basins

The geography is also changing.

Traditional producers such as Nigeria, Angola, Algeria, Libya and Egypt remain important, but newer opportunities are attracting increasing attention.

Namibia’s Orange Basin has become one of the most closely watched exploration regions in the world.

Uganda is moving toward commercial oil production.

Mozambique remains one of Africa’s most significant gas opportunities.

Côte d’Ivoire has emerged as an increasingly important upstream market.

This diversification matters because Africa’s future petroleum industry is unlikely to be concentrated exclusively in the traditional producing countries.

5. Nigeria: A Potential Case Study in Petroleum Resurgence

Nigeria illustrates both the opportunity and the complexity of Africa’s oil and gas resurgence.

For years, the country struggled with declining production, ageing infrastructure, underinvestment, crude theft, pipeline disruptions and regulatory uncertainty.

That picture is beginning to change.

Nigeria’s upstream regulator reported average crude oil and condensate production of approximately 1.735 million barrels per day in June 2026, including 1.56 million barrels per day of crude oil. The regulator described this as a 74-month high for crude production and attributed the improvement partly to greater operational stability and the absence of major pipeline outages during the period.

More importantly, the investment pipeline is expanding.

The Nigerian Upstream Petroleum Regulatory Commission reported in August 2026 that 22 major offshore projects were expected between 2026 and 2030, with estimated investment potential of $30 billion to $50 billion.

The regulator also reported that more than $57 billion in Field Development Plans had been approved since 2024, with some already progressing toward final investment decisions.

If these projects are executed successfully, Nigeria could increase production, create jobs, strengthen energy security and generate significant fiscal and foreign-exchange benefits.

But production growth alone should not be considered success.

Nigeria’s greater opportunity lies in connecting upstream production to:

• Gas processing
• Power generation
• Petrochemicals
• Fertiliser
• Refining
• Local manufacturing
• Engineering services
• Oilfield services
• Logistics
• Technology
• Export infrastructure

The goal should be to extract more economic value from each barrel and cubic foot of gas, rather than simply exporting more raw hydrocarbons.

6. Gas May Be Africa’s Most Strategic Hydrocarbon Opportunity

If oil is experiencing a resurgence, natural gas may be experiencing an even more strategically important transformation.

Gas occupies a complicated position in the energy transition.

It is a fossil fuel, but it generally produces fewer emissions at the point of combustion than coal and can provide flexible power generation alongside variable renewable sources.

For Africa, however, the argument for gas extends beyond emissions.

It is about development.

The continent needs electricity.

It needs industrial heat.

It needs fertiliser.

It needs reliable manufacturing infrastructure.

It needs affordable cooking fuels.

It needs feedstock for petrochemical industries.

It needs export revenue.

Natural gas can contribute to all of these.

The IEA expects global LNG supply growth to accelerate significantly in 2026, while gas demand in Africa and the Middle East is forecast to grow by approximately 3.5%, driven partly by industrial and power-sector demand.

Africa already has substantial gas resources.

The African Energy Chamber estimates that the continent produced more than 300 billion cubic metres of natural gas in 2024 and accounted for approximately 8.5% of global LNG supply.

Yet enormous quantities of African gas remain undeveloped.

This creates an opportunity to turn gas from an underutilised resource into an industrial development platform.

7. LNG Is Becoming a Strategic Asset

Liquefied natural gas is increasingly important because it allows gas-producing countries to participate in global energy markets even when pipeline infrastructure is unavailable.

For Africa, LNG can create several opportunities.

Export earnings

LNG can generate foreign exchange and government revenue.

Domestic energy supply

Gas projects can support domestic electricity generation.

Industrialisation

Gas can provide feedstock and energy for industrial facilities.

Regional integration

Pipeline and gas-processing infrastructure can support neighbouring markets.

Energy security

Domestic gas production can reduce dependence on imported fuels.

Mozambique, Nigeria, Algeria, Angola, Egypt and Senegal are therefore strategically important to Africa’s LNG future.

But LNG projects require enormous capital investment, long development timelines and stable operating environments.

They also face increasing scrutiny regarding methane emissions and the long-term outlook for gas demand.

The commercial winners will therefore need to combine cost competitiveness with environmental credibility.

8. The Rise of Independent African Energy Companies

One of the most important structural changes in Africa’s oil and gas sector is the increasing role of indigenous and independent companies.

International oil companies are continuing to reassess portfolios.

Mature assets that may no longer fit the strategic priorities of large multinational companies can represent opportunities for smaller, more specialised producers.

This is contributing to an asset-transfer cycle.

International companies can release capital from mature assets.

African independents can acquire producing fields and infrastructure.

Governments can potentially increase domestic ownership.

Local companies can develop technical expertise.

Service providers can build stronger domestic capabilities.

African energy companies therefore have an opportunity to move from being contractors and minority participants to becoming asset owners and regional energy companies.

But ownership alone is not enough.

Successful operators will need:

• Strong corporate governance
• Access to capital
• Technical expertise
• Safety systems
• Environmental management
• Reliable project execution
• Community relationships
• Commercial discipline

The next generation of African energy companies will have to compete on performance rather than nationality alone.

9. Frontier Exploration Is Back

The resurgence is also visible in exploration.

Namibia has become one of the most prominent examples.

Multiple offshore discoveries in the Orange Basin have generated expectations that Namibia could become a significant new oil-producing country.

But discovery is only the beginning.

A resource must move through several stages:

Discovery → appraisal → commercial assessment → development plan → final investment decision → infrastructure → production.

This is where frontier opportunities often encounter difficulty.

Large discoveries can still fail to become commercial projects if:

• Development costs are too high
• Fiscal terms are unattractive
• Infrastructure is unavailable
• Market access is uncertain
• Local-content requirements are difficult to satisfy
• Environmental constraints increase costs
• Financing becomes unavailable
• Commodity-price assumptions deteriorate

Namibia’s challenge is therefore not simply to discover oil.

It is to create an ecosystem capable of commercialising discoveries efficiently and responsibly.

10. Deepwater Is Becoming Increasingly Important

Africa’s next wave of oil production is likely to be increasingly offshore.

West Africa already has extensive deepwater experience, while new developments in Angola, Nigeria, Namibia and other Atlantic-margin markets are expanding the frontier.

Westwood forecasts more than 8,000 wells to be drilled across Africa between 2026 and 2032, including more than 360 subsea wells, representing a significant increase in subsea drilling activity.

Deepwater developments can offer major advantages.

They can access large reserves.

They can reduce some of the infrastructure constraints associated with remote onshore operations.

They can provide long production lives.

However, they are capital intensive.

They also require advanced engineering, subsea technology, specialised vessels and sophisticated project management.

This creates an opportunity for African companies to develop capabilities in the oilfield-services ecosystem.

The economic prize is therefore larger than upstream production itself.

11. The Downstream Sector Is Entering a New Era

Africa has historically suffered from a major structural imbalance:

The continent produces crude oil but imports large volumes of refined petroleum products.

This creates unnecessary exposure to international refining margins, shipping costs, foreign exchange volatility and supply disruptions.

The growth of domestic refining capacity could change this.

Large-scale refineries, including Nigeria’s Dangote refinery, are changing regional petroleum-product flows and creating new possibilities for crude-to-product integration.

However, Africa’s refining challenge remains enormous.

The African Energy Chamber estimates that refined-product demand could rise from approximately 4 million barrels per day in 2024 to more than 6 million barrels per day by 2050.

This means a few major refineries will not solve the entire problem.

Africa will need:

• More refining capacity
• Better refinery maintenance
• Storage infrastructure
• Product pipelines
• Maritime infrastructure
• Trucking and distribution networks
• LPG infrastructure
• Petrochemical facilities
• Regional petroleum-product trading systems

The opportunity is to move from an export-and-import petroleum model toward a more integrated African energy value chain.

12. The Petrochemical Opportunity Is Often Overlooked

Oil and gas are not simply fuels.

They are industrial feedstocks.

Hydrocarbons are used in the production of plastics, chemicals, synthetic materials, fertilisers, pharmaceuticals, packaging and numerous industrial products.

For Africa, petrochemicals could therefore provide a pathway toward industrial diversification.

Instead of exporting crude oil and importing finished products, countries can capture more value by developing processing and manufacturing capabilities domestically.

Natural gas is particularly important for fertiliser production.

This creates a direct connection between petroleum policy and food security.

More affordable domestic gas can support fertiliser production.

Fertiliser can increase agricultural productivity.

Agricultural productivity can support food processing and manufacturing.

Manufacturing creates jobs and tax revenue.

This is how hydrocarbons can contribute to a broader economic transformation.

13. Technology Is Changing the Economics of Oil and Gas

The resurgence of oil and gas does not mean returning to old operating models.

Technology is fundamentally changing the industry.

Artificial intelligence and advanced analytics are being applied to:

• Reservoir modelling
• Exploration
• Predictive maintenance
• Production optimisation
• Equipment monitoring
• Drilling
• Supply-chain management
• Commodity trading
• Energy forecasting

Digital twins can improve understanding of complex facilities.

Remote monitoring can reduce the need for personnel in hazardous environments.

Automation can improve drilling efficiency.

Satellite technology can improve environmental monitoring and infrastructure surveillance.

Advanced seismic imaging can improve exploration decisions.

These technologies matter because the industry’s competitive advantage is increasingly determined by how efficiently companies can extract value from capital-intensive assets.

The next oil boom, if it occurs, will not be powered only by more wells.

It will be powered by better data, better technology and better decision-making.

14. Methane and Emissions Will Define the Next Investment Cycle

The resurgence of oil and gas will occur under much greater environmental scrutiny than previous cycles.

Methane is particularly important.

Leakage from production, processing and transportation can undermine the climate performance of natural gas.

Investors, regulators and customers are increasingly demanding greater transparency around emissions.

This creates pressure on operators to deploy:

• Methane detection systems
• Leak detection and repair programmes
• Flare reduction
• Electrification
• Renewable power for operations
• Carbon-management technologies
• More efficient equipment
• Transparent emissions reporting

This is not simply about environmental compliance.

It is increasingly a question of market access.

Companies that cannot demonstrate credible emissions performance may eventually face higher financing costs, regulatory constraints or reduced access to certain markets.

15. The Energy Transition Is Not the Enemy of Oil and Gas

The oil and gas industry often presents the energy transition as an existential threat.

That is too simplistic.

The transition is creating both risks and opportunities.

Oil companies can invest in renewables.

Gas companies can participate in flexible power generation.

Energy companies can develop carbon-management solutions.

Traditional engineering capabilities can be applied to offshore wind, hydrogen and other technologies.

Digital capabilities developed in petroleum can transfer into other energy sectors.

The strongest energy companies of the future may therefore be multi-energy companies, rather than pure-play oil companies.

The question is not:

Oil or renewables?

The more strategic question is:

What combination of energy resources and technologies can deliver reliable, affordable and increasingly lower-carbon energy?

16. Capital Discipline Will Separate Winners From Losers

One of the defining characteristics of the new oil and gas cycle is capital discipline.

Wood Mackenzie’s 2026 mid-year assessment estimated that the global upstream sector could generate approximately $495 billion in additional cash flow during 2026 under its Brent-price assumption, yet it noted that investment budgets had remained broadly flat rather than immediately expanding.

This is significant.

The industry has learned from previous boom-and-bust cycles.

High prices do not automatically justify aggressive spending.

Companies increasingly want projects that can:

• Break even at lower oil prices
• Reach production quickly
• Generate strong cash flow
• Use existing infrastructure
• Minimise execution risk
• Provide flexibility
• Meet environmental requirements

This creates opportunities for brownfield developments, tiebacks, marginal-field projects and short-cycle developments.

Africa can benefit if its regulatory systems make these projects easier to execute.

17. Regulation Will Determine Africa’s Competitiveness

Oil and gas investment is extremely sensitive to regulatory uncertainty.

A resource may be commercially attractive underground but economically unattractive above ground.

Investors consider:

• Fiscal terms
• Taxes
• Royalties
• Production-sharing contracts
• Licensing processes
• Contract sanctity
• Local-content requirements
• Environmental regulations
• Community obligations
• Currency convertibility
• Security
• Infrastructure access

Countries competing for capital therefore need to provide more than geological potential.

They need investment certainty.

This is why licensing reforms, transparent bid rounds and stable fiscal frameworks matter.

Africa has substantial geological resources.

Its challenge is converting geological potential into bankable projects.

18. The Social Licence to Operate Is Becoming More Important

Oil and gas projects do not exist in isolation.

They operate in communities.

Where communities perceive that they bear environmental and social costs without receiving sufficient benefits, conflict can emerge.

This can result in:

• Production disruptions
• Infrastructure damage
• Litigation
• Reputational damage
• Higher operating costs
• Delayed projects

The industry therefore needs stronger approaches to community engagement.

This includes:

• Transparent revenue-sharing mechanisms
• Employment opportunities
• Local procurement
• Community development
• Environmental remediation
• Grievance mechanisms
• Host-community participation
• Clear communication

For Africa’s next petroleum cycle to be sustainable, communities must increasingly be viewed as stakeholders rather than obstacles.

19. Africa’s Biggest Opportunity Is Value Addition

Africa’s petroleum challenge can be summarised in one sentence:

The continent has often captured too little value from the resources it produces.

The next cycle presents an opportunity to change that.

Instead of focusing exclusively on crude production, countries can develop integrated energy ecosystems.

Oil can support:

Exploration → Production → Refining → Petrochemicals → Manufacturing → Exports

Gas can support:

Production → Processing → Power → Fertiliser → Industry → LNG → Regional Trade

This approach creates more jobs, more businesses, more tax revenue and greater technological capability.

It also makes the sector less vulnerable to commodity-price cycles.

20. What the Resurgence Means for Investors

For investors, the resurgence creates several areas of opportunity.

Upstream

New exploration, deepwater projects, brownfield redevelopment and marginal fields.

Gas

Processing, pipelines, LNG, domestic gas distribution and gas-to-power.

Midstream

Storage, transportation, terminals, pipelines and infrastructure services.

Downstream

Refining, petroleum products, LPG and distribution.

Oilfield Services

Engineering, drilling, maintenance, subsea technology and specialised services.

Digital Energy

AI, analytics, automation, cybersecurity and remote monitoring.

Energy Infrastructure

Power generation, transmission, storage and renewable integration.

The best opportunities may not necessarily be in owning the commodity.

They may be in owning the infrastructure that enables the commodity to create value.

21. What Governments Should Do

Governments seeking to benefit from the resurgence should focus on five priorities.

1. Improve investment certainty

Investors need predictable fiscal and regulatory frameworks.

2. Develop infrastructure

Pipelines, ports, storage, power and processing facilities are essential to commercialising resources.

3. Promote domestic value addition

Production should feed refining, petrochemicals, fertiliser, manufacturing and power generation.

4. Strengthen institutions

Transparent regulators and credible institutions reduce investment risk.

5. Use petroleum revenues strategically

Oil and gas revenues should support productive investment rather than excessive dependence on recurrent expenditure.

The objective should be to convert finite natural resources into lasting economic capability.

22. What African Energy Companies Should Do

African operators should prepare for a more competitive industry.

They should:

• Build strong technical capabilities.
• Invest in digital technologies.
• Maintain strict capital discipline.
• Develop local supply chains.
• Strengthen corporate governance.
• Improve environmental performance.
• Build strategic partnerships.
• Develop gas businesses.
• Pursue value-added opportunities.
• Prepare for multiple energy scenarios.

Local ownership can be an advantage, but it is not a substitute for competence.

The African companies that succeed in the next petroleum cycle will be those capable of operating at international standards while understanding local markets better than international competitors.

23. The Biggest Risk: Mistaking a Resurgence for a Permanent Boom

There is one major danger in the current optimism.

Oil and gas prices are cyclical.

Geopolitical events can produce temporary price spikes.

Supply disruptions can create windfall revenues.

But high prices can disappear quickly.

Companies and governments that interpret a temporary price surge as a permanent structural boom could repeat the mistakes of previous cycles.

The prudent approach is therefore to treat today’s resurgence as a window of opportunity, not an excuse for complacency.

Invest while the market is favourable.

Improve efficiency.

Develop infrastructure.

Build local capability.

Diversify economies.

Save and invest resource revenues.

Prepare for lower-carbon energy systems.

That is how an oil and gas resurgence becomes an economic transformation rather than another boom-and-bust cycle.

Conclusion: The Oil and Gas Industry Is Not Dead — It Is Being Repositioned

The global energy system is changing.

Renewables are expanding.

Electric vehicles are gaining market share.

Energy efficiency is improving.

AI is changing electricity demand.

Climate policy is influencing investment.

Yet oil and gas remain deeply embedded in the global economy.

The events of recent years have demonstrated that energy security cannot be taken for granted. The result is renewed investment in multiple forms of energy, including hydrocarbons.

For Africa, this creates an important moment.

The continent has substantial oil and gas resources, growing energy demand, enormous infrastructure needs and a large population that requires jobs and economic opportunity.

The question is whether Africa will once again use its hydrocarbons primarily as commodities to export or whether it will use them as foundations for industrialisation.

That distinction could determine the economic significance of the next oil and gas cycle.

The opportunity is to build refineries rather than simply export crude.

To process gas rather than flare it.

To produce fertiliser rather than import it.

To develop petrochemicals rather than import finished products.

To build African energy companies rather than remain dependent on foreign operators.

To develop engineering and technology capabilities rather than simply purchase them.

And ultimately, to convert natural-resource wealth into productive economic capacity.

The resurgence of oil and gas is therefore not simply a story about barrels, cubic feet and commodity prices.

It is a story about energy security, industrialisation, capital, technology and Africa’s ability to capture more value from its own resources.

The next decade will reveal whether the continent can turn this renewed interest in hydrocarbons into something much larger:

a foundation for sustainable economic transformation.