Industry

Africa's LNG ambitions are being tested by global turbulence.

Africa’s oil and gas sector is entering a period of accelerated transformation 

The continent’s upstream potential, midstream ambitions and downstream vulnerabilities are all being reshaped by a global environment defined by geopolitical tensions, shipping disruptions, sanctions and shifting investment flows. These pressures are forcing African producers, national oil companies (NOCs), and policymakers to rethink strategy, timelines and risk management.

While Africa remains central to global energy security, the path forward is no longer linear. The continent’s energy landscape is evolving — and the pace of change is being set as much by global turbulence as by domestic policy choices.

New frontiers, new pressures

Africa’s upstream sector is experiencing both renewal and recalibration.

New frontiers are emerging as Namibia’s offshore discoveries continue to attract global attention. Ivory Coast's Baleine field is reshaping West Africa’s exploration map, and Uganda’s Lake Albert development is progressing toward first oil.

Traditional producers, however, are facing structural pressures. Nigeria continues to struggle with pipeline insecurity and feedgas constraints. Angola is restructuring Sonangol and revising its licensing strategy. Mature basins across North Africa require reinvestment to maintain output.

Geopolitical tensions have also altered investor behaviour. Sanctions, supply chain delays and financing constraints have made upstream investment more cautious, with international oil companies (IOCs) prioritising lower risk and faster cycle assets. This trend is visible in the shift toward short‑cycle offshore projects in West and southern Africa, and the cautious approach to long‑led developments in East and southern Africa. This has elevated the role of African NOCs, many of which are undergoing commercialisation reforms to attract capital and improve operational efficiency.

Regional integration challenges

Africa’s midstream infrastructure — pipelines, storage, and transport networks — is increasingly exposed to global and regional disruptions.

Pipeline vulnerabilities remain a major constraint. The Niger–Benin pipeline has faced security and political uncertainty. Nigeria’s pipeline network continues to suffer from vandalism and theft. Chad-Cameroon pipeline operations have been affected by governance disputes.

Meanwhile, regional midstream ambitions are advancing but unevenly. The East African Crude Oil Pipeline (EACOP) remains a flagship project but faces financing and environmental scrutiny even as it progresses. The West African Gas Pipeline continues to struggle with reliability issues. The TransSaharan Gas Pipeline remains aspirational amid security concerns.

Geopolitical tensions have also disrupted traditional shipping routes. Some carriers have begun rerouting cargoes toward East African ports, including Kenya, as part of broader adjustments to avoid Red Sea insecurity. While still evolving, these shifts highlight Africa’s growing role as both a transit and destination market in a fragmented global logistics environment.

Refining gaps and market fragility

Africa’s downstream sector remains structurally vulnerable. The continent imports a significant share of its refined petroleum products, leaving domestic markets exposed to global price volatility and supply disruptions.

The closure of several South African refineries has increased import dependence. The Dangote Refinery in Nigeria is expected to reshape regional product flows once fully operational. Uganda, Angola and Senegal are pursuing new or upgraded refining capacity to reduce import reliance.

Global geopolitical tensions — including sanctions, shipping disruptions, and insurance volatility — have amplified downstream fragility. Countries with limited storage capacity or heavy reliance on imported diesel and petrol have faced periodic supply tightness and pricing pressure.

LNG opportunity under stress

Gas remains Africa’s most promising transition fuel, but the continent’s LNG ambitions are being tested by global turbulence. Mozambique LNG remains delayed due to security concerns and cost escalation. Senegal–Mauritania’s GTA project has experienced timeline adjustments. Tanzania’s LNG negotiations have regained momentum after years of stagnation. Nigeria LNG faces feed-gas constraints and maintenance backlogs.

Global shipping insecurity — particularly in the Red Sea and Suez Canal — has increased voyage times, insurance premiums and charter rates. Some LNG and petroleum cargoes have been rerouted around the Cape of Good Hope, adding significant cost and delay. These pressures complicate Africa’s efforts to position itself as a reliable LNG supplier in a competitive global market.

NOCs at a crossroads

National oil companies are becoming more central to Africa’s energy future as IOCs rebalance portfolios.

Nigerian National Petroleum Company Limited has taken major commercialisation efforts in Nigeria. Sonangol is restructuring and divesting asset in Angola. Ghana National Petroleum Corporation has expanded its role in Ghana’s upstream sector. ENH (Mozambique) and the National Hydrocarbons Corporation of Cameroon are navigating complex LNG and gas monetisation strategies.

NOCs are facing the dual challenge of delivering national energy security and revenue stability, and competing for capital in a world increasingly shaped by ESG pressures and geopolitical risk. Their ability to modernise governance, improve transparency and manage complex partnerships will determine the pace of Africa’s energy transformation.

The new risk landscape

Africa’s oil and gas sector must now operate within a risk environment defined by:

- Shipping insecurity and rerouting pressures

- Supplychain fragmentation and equipment delays

- Sanctions exposure affecting financing and trade

- Insurance volatility, including rising warrisk premiums

- EPC delays and cost overruns

- Contractual disputes, including force majeure and hardship claims

- Financing constraints as lenders reassess geopolitical risk

These risks are not temporary. They represent a structural shift in how global energy markets function — and African producers ought to adapt accordingly.

Shift in strategies

Africa remains central to global oil and gas supply, with vast reserves, growing domestic demand, and strategic geographic positioning. But the continent’s energy future will depend on its ability to navigate a world where geopolitical tensions, shipping disruptions and investment realignments are the new normal. This will require stronger regional cooperation, diversified supply chains, modernised NOCs, increased private sector involvement, resilient midstream infrastructure and flexible commercial strategies.

Africa’s energy landscape is evolving — and those who adapt early will shape the continent’s next chapter. 

The article has been written by Elijah Paul RukidiMpuuga, FCIArb (UK), founder and principal, Equitas Dispute Resolution Group

Sonangol is operator of Blocks 3/05 and 3/05A.

As part of a transaction process, Sonangol E&P has elected to participate in the acquisition of Etu Energia's interests in Blocks 3/05 and 3/05A offshore Angola 

This establishes Sonangol, Afentra and Etablissements Maurel & Prom SA's joint acquisition of Etu's 10% interest in Block 3/05 and 13.33% interest in Block 3/05A.

With Sonangol's participation -- which is also operator of the blocks -- Afentra's new sale and purchase agreement with Etu outlines the acquisition of 3.33% interest in Block 3/05 and a 3.66% interest in Block 3/05A.

The consolidated partnership of Sonangol E&P, Afentra and Maurel & Prom in Block 3/05 and 3/05A will accelerate the ongoing redevelopment programme that is beginning to unlock the full potential of the assets which will lead to sustained increases in both production and reserves over the coming years.

Afentra continues to pursue its disciplined approach to value creation, leveraging success-based transaction structures and a strong local partnership framework. The Company remains confident in the significant upside potential of Blocks 3/05 and 3/05A and looks forward to continued constructive engagement with all stakeholders.

Paul McDade, Chief Executive Officer of Afentra plc, said, "The evolution of the transaction structure to include Sonangol in the Etu acquisition is a welcome development and is a clear demonstration of the collaborative approach that has been achieved within the partnership. The joint acquisition further consolidates and aligns all parties as we work together to unlock the full potential of Blocks 3/05 and 3/05A. This transaction exemplifies Afentra's disciplined strategy of building a high-quality, cash-generative asset base in Africa in close partnership with host governments and local operators." 

Partners will reprocess 3D seismic data in PEL87.

Operator of Petroleum Exploration License 87 (PEL 87) offshore Namibia, Pancontinental Energy Limited, has received approval from the Namibian Ministry of Industry, Mines and Energy (MIME) on license extension by 12 months to 22 January 2027

During the extension period, the PEL 87 joint venture partners will undertake an environmental impact assessment (EIA), reprocess 3D seismic data and seismic interpretation, and drill an exploration well. 

Work is underway on the EIA since 2025 while a subset of PEL 87 3D is being reprocessed. Governing blocks 2713A and 2713B in the Orange Basin, seismic signal quality in the license, especially in targeted areas, will see marked improvement following reprocessing work.

Robert Bose, chief executive officer of Sintana Energy, said, "We are grateful to the Minister for the extension of PEL 87. We look forward to the continued refinement of the existing seismic work in anticipation of securing a farm in partner to progress the project to a focused drilling programme." 

Sintana has a 7.4% indirect carried interest in PEL 87.

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