The African upstream oil and gas sector is gearing up for an active year in 2026, with mergers and acquisitions (M&A) expected to surge as licensing rounds unlock new investment opportunities across the continent.

According to the African Energy Chamber’s State of African Energy 2026 Outlook, the M&A momentum is being driven by strategic shifts among international oil companies, global independents and emerging African operators.

Globally, upstream M&A deals totaled $51 billion in the first half of 2025 — a decline from late 2024 due to market volatility, financial uncertainty and restrictive U.S. trade measures. While deal-making slowed in North America, modest increases were recorded internationally, led by corporate consolidations and joint exploration efforts in core regions.

Across Africa, however, the pace of M&A has remained robust as international oil companies divest mature onshore assets, paving the way for indigenous and regional players to expand their portfolios. In Nigeria, for instance, local independents such as Seplat, Oando, First E&P, and Aiteo have been at the forefront of asset acquisitions, leveraging auctions and corporate transactions to strengthen their market positions.

Recent high-profile transactions 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 the divestment of TotalEnergies and Equinor ASA’s assets to Chappal Energies Offshore. In March 2025, Shell completed the sale of its onshore subsidiary, Shell Petroleum Development Company of Nigeria Ltd, to Renaissance, a consortium of five indigenous firms — marking a significant milestone in Nigeria’s upstream restructuring.

These divestments have bolstered the participation of local operators in onshore activities, while international players continue to focus on high-value deepwater projects. Shell’s final investment decision (FID) for the Bonga North deepwater field, supported by Nigeria’s Petroleum Industry Act, reflects renewed investor confidence in the country’s upstream potential.

Elsewhere, trading giants are expanding their African presence. Vitol’s $1.65 billion acquisition of Eni assets in Côte d’Ivoire and the Republic of Congo has strengthened its regional LNG and supply portfolio, while Shell’s $510 million purchase of TotalEnergies’ 12.5% stake in Nigeria’s Bonga field underscores a renewed focus on high-return assets.

Meanwhile, licensing rounds in Algeria, Libya, and other countries are further stimulating deal activity. Algeria’s first bid round in a decade awarded five of six blocks under new fiscal terms, while Libya launched its first licensing round in 17 years, offering 22 blocks with improved investment incentives. These reforms reflect a broader continental shift toward investor-friendly policies aimed at attracting fresh exploration and development capital.

“The African oil and gas sector is set for significant consolidation in 2026, particularly among midsize and African independent companies,” said NJ Ayuk, Executive Chairman of the African Energy Chamber.

“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.”

Ayuk also noted a shift in transaction structures, with cash deals still dominant but stock-for-stock swaps gaining traction. “The current climate in African oil and gas can be characterized by an ‘eat or be eaten’ mentality, with many companies prepared to be aggressive and opportunistic in 2026 as momentum builds,” he added.

With growing investor confidence and a wave of strategic realignments, Africa’s upstream industry is poised for one of its most transformative years yet.