E&P

Africa’s energy systems are deeply interconnected with global markets.

The escalating confrontation between the United States, Israel and Iran has introduced a new phase of geopolitical uncertainty into global energy markets

While the immediate focus remains on security implications in the Middle East, the commercial and operational consequences for Africa’s oil, gas and energy sectors are both significant and far-reaching. As global supply chains absorb the shock of rising tensions, African producers, exporters, importdependent states, and emerging energy markets are confronting a rapidly shifting landscape.

Africa’s energy systems are deeply interconnected with global markets. Crude exports, LNG flows, refinery feedstock, maritime transport and downstream pricing all depend on stable international conditions. When geopolitical volatility disrupts these conditions, the effects cascade across the continent’s upstream, midstream and downstream operations.

Oil price volatility and supply side uncertainty

The US-Israel-Iran conflict has injected renewed volatility into global oil markets. Brent crude prices have experienced sharp fluctuations driven by fears of supply disruption, potential sanctions and the risk of escalation in the Strait of Hormuz – a corridor through which roughly one fifth of global oil supply transits.

For established African producers and exporters – Nigeria, Angola, Libya, Algeria, Egypt, the Republic of Congo, Gabon, Equatorial Guinea and South Sudan – price volatility presents both opportunity and risk. Higher prices may boost short-term revenues, but instability complicates:

∙ fiscal planning

∙ production scheduling

∙ investment decisions

∙ long-term project financing

South Sudan is particularly vulnerable. Although it produces the crude, it relies entirely on Sudan for pipeline transit, refining and export through Port Sudan. Any geopolitical shock that affects global prices or regional stability amplifies the fragility of this arrangement already impacted by the internal conflict in Sudan.

For import-dependent African economies – Kenya, Uganda (until production begins), Rwanda, Tanzania, Ethiopia, Senegal, Ghana, and South Africa – price spikes translate into:

∙ higher fuel import bills

∙ inflationary pressure

∙ increased subsidy burdens

∙ downstream pricing instability

The conflict has therefore widened the divergence between Africa’s energy exporters and importers, with both groups facing heightened commercial risk.

LNG shipping disruptions and maritime chokepoints

The Red Sea, Bab elMandeb, and the Strait of Hormuz remain critical arteries for global LNG and petroleum shipments. Rising tensions have led to:

∙ vessel diversions

∙ increased war risk insurance premiums

∙ longer shipping times

∙ higher freight costs

∙ rerouting around the Cape of Good Hope

For African LNG exporters – notably Algeria, Egypt and Mozambique – these disruptions affect:

∙ delivery schedules

∙ contract performance

∙ shipping economics

∙ buyer confidence

Mozambique, in particular, is emerging as a major LNG player. Its offshore reserves position it as a future global supplier, but project timelines and financing conditions are highly sensitive to global LNG market volatility. Any instability in shipping routes or pricing affects investor appetite and project momentum.

For LNG importing markets in North and East Africa, rerouting adds cost and uncertainty to already tight supply chains, affecting power generation, industrial output and domestic energy security.

Infrastructure and upstream project risk

Energy infrastructure across Africa – pipelines, refineries, offshore platforms, LNG terminals and power generation assets – is highly sensitive to global market conditions.

The current geopolitical environment has intensified:

∙ EPC contract renegotiations

∙ project delays

∙ cost escalations

∙ supplychain bottlenecks

∙ financing challenges

Upstream investment decisions are being recalibrated as international oil companies (IOCs) and national oil companies (NOCs) reassess:

∙ fluctuating price decks

∙ higher insurance premiums

∙ sanctions exposure

∙ shipping and logistics risk

Emerging producers such as Uganda, Namibia and Ghana are particularly exposed.

∙ Uganda’s Tilenga and Kingfisher projects, along with the EACOP pipeline, depend on stable financing and predictable price environments.

∙ Namibia’s offshore discoveries have generated global excitement, but long-term development decisions hinge on market stability.

∙ Ghana, while already producing, remains sensitive to price swings and relies heavily on imported refined products.

These countries illustrate how geopolitical conflict affects not only current production but also Africa’s future energy trajectory.

Commercial and contractual pressure across the value chain

The combination of price volatility, shipping disruptions and project delays has increased contractual tension across the African energy sector. Key areas of pressure include:

∙ crude supply agreements

∙ LNG offtake contracts

∙ pipeline transportation agreements

∙ refinery feedstock contracts

∙ EPC and O&M contracts

∙ charter party and shipping arrangements

Force majeure claims, renegotiation requests and performance disputes are to become more common as parties struggle to meet obligations under rapidly changing conditions.

This is where commercial risk management becomes essential.

Why ADR is becoming critical in Africa’s energy sector

In a period of heightened geopolitical uncertainty, effective, neutral dispute resolution capacity is no longer optional – it is a strategic necessity.

Energy disputes often involve:

∙ crossborder parties

∙ complex technical issues

∙ high value contracts

∙ time sensitive operations

∙ confidentiality requirements

Alternative Dispute Resolution – particularly arbitration, mediation and expert determination – offers:

∙ neutrality

∙ enforceability

∙ sector-specific expertise

∙ procedural flexibility

∙ continuity of commercial relationships

As global conflict continues to reshape commercial risk, African energy companies, investors and governments increasingly require dispute resolution professionals who understand both the geopolitical landscape and the operational realities of the oil and gas sector.

Africa’s energy future in a volatile world

The US-Israel-Iran conflict has underscored a fundamental truth: Africa’s energy markets are deeply exposed to global geopolitical shocks. From upstream investment to LNG shipping, refinery operations and downstream pricing, the continent’s oil and gas sector must navigate a more volatile and interconnected world.

For African producers, importers and infrastructure operators, resilience will depend on:

∙ robust commercial risk management

∙ flexible contracting strategies

∙ diversified supply chains

∙ and access to principled, neutral dispute resolution mechanisms

In this environment, the ability to anticipate disruption – and resolve disputes efficiently when they arise – will be essential to sustaining Africa’s energy growth and stability.

The article has been written by Elijah Paul RukidiMpuuga, FCIArb​, International arbitrator and founder, Equitas Dispute Resolution Group 

2025 will remain big for Seplat in terms of gas generation.

Nigerian exploration and production company, Seplat Energy, has recorded substantial results for 2025 driven largely by output from newly acquired offshore assets as well as by building on its already well established onshore portfolio

"In 2025 we clearly illustrated our ability to operate at scale. We benefitted from successful execution of several key offshore activities that kick-started life for Seplat as an offshore operator, while at the same time delivering onshore production performance that was the strongest in recent memory," said Roger Brown, chief executive officer, Seplat, which recorded 14% year-on-year production delivery onshore. 

The last year will remain big for Seplat also in terms of gas generation as it completed the Sapele Gas Plant, and the ANOH gas plant which was up and running to generate gas starting January 2026. Production from ANOH is stable at 50-70 mn standard cu/ft per day, with ~60kbbl condensate currently in storage. 

"In recent weeks we were delighted to achieve first gas at the ANOH Gas Plant and are on track to doubling Joint Venture gas volumes at Oso-BRT to 240 mn standard cu/ft per day in the second half of 2026," said Brown while mentioning the company's aim to achieve working interest production to 200 kboepd by 2030.

In 2025, Seplat's group production averaged 131,506 boepd, up 148% from 2024 (52,947 boepd) on the back of offshore consolidation. The Yoho platform outage, however, limited growth rate at 9% year on year on a pro-forma basis. The company plans to restart it in 2Q 2026.

Natural gas liquids recovery from the company's first major offshore project, EAP IGE, peaked at approximately 20 kboepd in 2025. Idle well restoration programme was a success beyond expectations as it added 48.6 kboepd gross production capacity from 49 wells.

"Drilling will be a decisive factor in meeting our long-term growth ambitions and I am pleased to announce that the first jack-up drilling rig is contracted, in country and set to arrive at Oso in 3Q to commence a multi-year, multi-well drilling campaign," said Brown.

VAALCO is now the operator in Kossipo.

VAALCO Energy has reported of a positive financial year for 2025 in Gabon and Cote d’Ivoire

In Gabon, it has successfully drilled, completed and placed on production the Etame 15H-ST development well in the 1V block of the Etame field, with a lateral of 250 meters of net pay in high-quality Gamba sands near the top of the reservoir.

In West Etame a step out exploration well that has been spudded promises 57% geologic prospects, leading to anticipation towards a strong production and reserves report for VAALCO in 2026.

In Ivory Coast, VAALCO is now the operator with a 60% working interest in the Kossipo field on the CI-40 Block with a field development plan expected to be completed in second half of 2026.

George Maxwell, Vaalco’s Chief Executive Officer, said, “We have begun 2026 with some very meaningful events that are positioning Vaalco to deliver expected 225% organic production growth by 2030. We have been confirmed as the operator with a 60% working interest in the Kossipo field, a discovery with an estimated 293 MMBOE in place located southwest from our highly productive Baobab field on the CI-40 Block. We are actively working with our partner PetroCI to submit an FDP in the second half of 2026 that we believe will help Vaalco grow its production in Cote d’Ivoire. We are also pleased with the encouraging start of the Gabon drilling campaign, the ET-15H-ST which stabilized at approximately 2,000 BOPD. The rig has remained on the Etame platform and is now drilling an exploration prospect in West Etame, that has a 57% chance of geological success and if successful could add production and additional reserves in Gabon. With the Baobab FPSO on track to return to the field and commence production in Q2 2026, coupled with the Gabon drilling campaign, we are looking to drive meaningful growth that we believe will translate into value for our shareholders in 2026 and beyond.”

The transaction will accelerate debt reduction for Kosmos. (Image source: Kosmos Energy)

In terms with an agreement in place, Panoro Energy has acquired 40.375% non-operating working interest in the Ceiba Field and Okume Complex production assets offshore Equatorial Guinea

Alongside future contingent payments that add up to US$39.5mn, the transaction is worth US$180mn.

This will give Panoro ownership of interests in Block G, with contingent payments of US$12.5mn linked to production performance at the Ceiba field and US$9mn payable in each of 2027, 2028 and 2029, subject to price and production volatilities. 

The transaction enhances liquidity from monetising non-core assets and accelerates debt reduction for Kosmos. Proceeds will be used to reduce borrowings outstanding under the reserves-based lending (RBL) credit facility.

Put in place during January, the transaction process will be through mid-year. It has been approved by the Government of Equatorial Guinea, and completion only remains subject to CEMAC customary approval. Over the two-year period post completion of the transaction, Kosmos expects to realise approximately US$100mn in total savings across capital expenditures and general and administrative expenses.

Andrew G Inglis, Kosmos Energy’s chairman and chief executive officer said, “This transaction reflects our continued focus on capital discipline and balance sheet resilience. The high-grading of the portfolio by accelerating the monetisation of later-life, non-operated production assets enables Kosmos to focus our capital and expertise on our world-class assets where we can add the most value for our stakeholders over the long-term. The proceeds from the transaction enhance liquidity and accelerate debt reduction, while the contingent payments ensure we retain exposure to future upside.”