By William Emmanuel Ukpoju
The latest outlook Report from the African Energy Chamber presents a nuanced view of the global oil and gas supply landscape, marked by short-term adjustments, medium-term optimism, and long-term projections. The report highlights regional trends, key drivers, and challenges shaping the energy sector.
The global oil supply projection has been revised downward by 1.3 million barrels per day (bpd) due to voluntary OPEC+ production cuts. Saudi Arabia, Kuwait, and the UAE are leading this effort to stabilize the market and adjust to changing demand. According to NJ Ayuk, Executive Chairman of the African Energy Chamber, “The OPEC+ production cuts aim to balance the market and prevent oversupply. This move will have a significant impact on the global oil supply landscape in the short term.”
Despite short-term adjustments, the medium-term outlook appears promising. By 2030, global crude oil and condensates supply is forecasted to approach 91 million bpd, driven by Africa’s resurgence and South America’s growth. Increased drilling in Angola and stable production in Nigeria signal growth, with Angola’s oil production expected to increase by 12% by 2025, while Nigeria’s production is projected to rise by 15% by 2025.
“Africa’s oil and gas industry is experiencing a resurgence, driven by increased investment and exploration,” Ayuk noted. “Angola and Nigeria are leading this growth, with other African countries poised to follow.” South America’s growth is propelled by shale and offshore developments, such as Argentina’s Vaca Muerta and Guyana’s burgeoning reserves. Argentina’s oil production is expected to increase by 25% by 2025, while Guyana’s production is projected to rise by 50% by 2025.
A long-term Brent price projection of $70/bbl increases resource recovery potential, making more projects economically viable. This price point supports investment in exploration and production, particularly in Africa and South America. Regional highlights include Angola’s increased drilling, Nigeria’s stable production, Argentina’s Vaca Muerta shale development, and Guyana’s offshore discoveries.
The report highlights investment opportunities in Africa and South America, particularly in exploration and production. With a projected $70/bbl Brent price, investors can capitalize on offshore developments in Guyana and Brazil, shale developments in Argentina and South Africa, and exploration and production opportunities in Angola and Nigeria.
Investment and capital expenditure play a vital role in Africa’s energy sector. Notably, Africa’s capital expenditure is projected to surge in 2024, reaching $47 billion, marking a 23% increase from 2023’s $38.5 billion. Despite a slight dip to $43 billion in 2025, CAPEX will soar to $54 billion by 2030. Furthermore, West Africa will drive over half of the continent’s CAPEX from 2023 to 2030, propelled by established oil giants like Nigeria and Angola, and emerging players like Mauritania, Senegal, Ghana, and Côte d’Ivoire.
In addition to investment growth, drilling and exploration activities are also on the rise. Africa’s drilling activity has rebounded, with 1,034 wells drilled in 2023, predominantly onshore (80%). Similarly, the momentum continues in 2024 with 1,060 wells expected, and onshore operations will remain dominant, consistently contributing 80% of the well count. Moreover, drilling is projected to peak in 2026 before tapering off to around 900 wells by the decade’s end.
Meanwhile, offshore rig demand mirrors drilling trends, growing from 29 rig years per year between 2020 and 2021 to about 40 rig years by 2024. In fact, in 2025, rig demand is set to jump by 18% compared to 2024 levels, reaching 46 rig years—a 59% increase from 2020 levels.
Moreover, Africa’s power generation mix is shifting, driven by renewable energy growth. Solar PV capacity is expected to cross 20 GW in 2024 and increase to nearly 90 GW by 2030. Likewise, wind capacity will surpass 11 GW in 2024 and reach nearly 50 GW by 2030. Additionally, hydropower will increase from 47.5 GW today to around 60 GW by 2030.
As a result, the share of renewables in Africa’s installed capacity mix is estimated to jump from over 28% today to over 45% in 2030. However, gas is expected to surpass 150 GW, maintaining fossil fuels’ dominance in Africa’s power generation mix. Meanwhile, coal will exhibit a gradual decline due to South African unit shutdowns.
In the same vein, Egypt’s 4.8 GW El Dabaa nuclear power plant will add to Africa’s nuclear-based power generation by 2031. Consequently, Africa’s overall installed capacity will jump 1.5 times from over 300 GW to nearly 460 GW by 2030.
Furthermore, power generation will rise from over 980 TWh today to nearly 1,400 TWh in 2030, with the share of renewables increasing from over 27% today to over 43% in 2030. Similarly, the share of nuclear will increase from 0.95% today to 2.8% by 2030.
Looking ahead, the African energy landscape is at a crossroads. While the continent’s energy demands continue to grow, the global shift towards renewable energy and reduced carbon emissions presents both opportunities and challenges. Africa’s energy future will depend on its ability to balance economic growth, energy security, and environmental sustainability.
On one hand, the continent’s vast renewable energy resources, particularly solar and wind, offer a promising pathway to a low-carbon future. Investments in renewable energy infrastructure, energy efficiency, and grid modernization will be critical to unlocking this potential.
On the other hand, Africa’s energy transition must also acknowledge the continent’s unique circumstances. Many African countries rely heavily on fossil fuels for economic development, energy access, and industrial growth. An abrupt shift away from fossil fuels could exacerbate energy poverty and hinder economic progress.
Ultimately, Africa’s energy future will require a nuanced and context-specific approach. Policymakers, investors, and industry leaders must work together to create an enabling environment that supports a gradual transition to a low-carbon economy, while also addressing the continent’s pressing energy needs.
By embracing this dual imperative, Africa can chart a sustainable energy path that promotes economic growth, energy security, and environmental stewardship. The African Energy Chamber’s 2025 Outlook Report provides a valuable roadmap for navigating this complex landscape and unlocking the continent’s full energy potential.