What have been major recent trends in the upstream oil and gas sector across Sub-Saharan Africa?

With abundant gas resources discovered across the region, there is a concerted effort to monetize volumes through LNG exports. New land-based LNG projects are proposed in Mozambique and Nigeria LNG is expanding to add a seventh liquefaction train. The rise of Floating LNG (FLNG) projects positions Sub-Saharan Africa as a global leader in this area. Cameroon, Congo, Senegal and Mauritania have FLNG projects, and other countries are developing theirs. 

Many countries are also prioritizing domestic gas utilization to stimulate economic growth, and gas-to-power projects are providing increasing energy access to the African population. To support demand, new gas infrastructure is being developed to connect fields to end-user markets. For example, Nigeria's AKK pipeline will transport gas from the Niger Delta to inland regions. It could also extend across North Africa to connect with European customers.

We also see the corporate landscape evolving. The major oil companies are reassessing their portfolios and divesting non-core assets, creating opportunities for African-focused and indigenous companies. These companies are acquiring assets and are poised to add value through targeted investments and developments.

Can you discuss Nigeria's upstream environment, and the significance of recent transactions?

Contrary to perceptions, the major oil companies are not exiting Nigeria; instead, they are strategically repositioning their portfolio. For instance, Shell has been an onshore operator for over 80 years, yet it continues to maintain its gas and deepwater operations. Indigenous companies are assuming operatorship of assets sold by the majors. Some of the companies have previously participated in divestments and understand the operating landscape. They have ambitious plans to redevelop the assets, aligning with the government's target to increase production.

Developing Nigeria's gas resources was previously hindered by infrastructure deficits, market access limitations, unfavorable taxation, low domestic pricing, and liquidity challenges in the power sector. However, we are seeing a turnaround with recent governmental reforms, including fiscal incentives for non-associated gas to encourage investments in the gas value chain. As the business environment improves, more players may explore opportunities to commercialize gas through power generation, petrochemicals, and export potential through NLNG or FLNG projects.

Which emerging oil and gas jurisdictions are drawing your attention in Africa?

Namibia stands out due to the scale of resources discovered in deep water. We could see at least two deepwater developments progress in the near term. Namibia offers operators a favorable combination of resource scale, a stable operating environment and competitive fiscal terms, which are crucial for lower-cost developments. The government's commitment to maintaining enabling policies will be vital to achieving first oil. Côte d'Ivoire also merits attention, especially with the recent Baleine and Calao discoveries opening geological plays. This has attracted interest from companies like Vitol, which has partnered with Eni.

Sustainability has become increasingly important, encompassing initiatives such as zero flaring, sustainable gas utilization, and net-zero development objectives, which are now prioritized by shareholders of international companies. Transparency and robust governance at both governmental and corporate levels are essential for creating a resilient ecosystem within Africa's oil and gas sector. The region's resource potential is attracting competitive investment opportunities, and strategic partnerships. Recent transactions, including over US$5 billion in divestments in Nigeria and Petronas farming into TotalEnergies' Kaminho project in the deepwater Kwanza basin, highlight the value placed on African oil and gas assets, despite global energy transition narratives. We expect governments to offer acreage through licensing rounds to attract explorers to prospective basins while also offering revised fiscal terms. These include Angola, Nigeria, Tanzania, Kenya and Uganda.

What is your outlook for the coming year in the oil and gas industry across the region?

We anticipate continued exploration success across Sub-Saharan Africa's basins, which still hold considerable undiscovered potential. The Orange basin will remain a focus area and other frontier basins in West Africa may uncover new exploration hotspots.

Several final investment decisions (FIDs) are coming up, including a potential development approval in Namibia. Nigeria's first FLNG project may also secure FID this year, potentially a game-changer for gas monetization efforts.