Deloitte flags five key challenges in Africa’s oil, gas sector
Deloitte has identified five interlinked challenges shaping the outlook of Africa’s oil and gas sector, warning that the continent’s energy industry continues to grapple with structural weaknesses, tightening capital flows and the pressures of the global energy transition.
According to its 2025 Deloitte West Africa Oil and Gas Outlook, the key challenges include constrained access to funding for independents, a persistent cost premium effect, ongoing security threats to critical infrastructure, limited regulatory collaboration and insufficient enabling infrastructure.
The report noted that while some of these problems are long-standing and deeply rooted in historical and institutional factors, others have been intensified by shifting global political and economic conditions, as well as the push for cleaner energy.
“Together, these challenges define a uniquely African landscape for 2025, one that demands adaptive thinking, collaborative innovation and long-term resilience,” the report stated.
Capital Remains the Most Defining Pressure Point
Deloitte emphasised that access to capital remains the single most defining pressure point for independent oil and gas producers across the region.
“While international oil companies (IOCs) continue to operate with deep financial buffers and globally diversified portfolios, African independents face tightening margins and growing investor hesitancy,” the report explained.
The firm attributed the growing funding challenges to a combination of factors, including ESG (Environmental, Social and Governance) pressures, the divestment from fossil fuels by major global financiers, poor corporate governance practices and perceived regulatory and political risks across African jurisdictions.
These dynamics, Deloitte noted, have significantly increased the cost of capital for African oil producers, resulting in a capital drought that has stalled exploration, delayed key projects and reduced competitiveness in the region’s upstream market.
“This capital drought has led to a concentration of additional investments among a small number of large players with access to deep funding pools, leaving local and independent operators struggling to sustain operations or expand capacity,” the report observed.
Need for Policy Coordination and Infrastructure Investment
Beyond financing constraints, Deloitte underscored that the lack of cross-border regulatory collaboration and the limited development of enabling infrastructure, including pipelines, refineries and storage facilities, continue to impede efficiency and value addition within the sector.
The report concluded that for Africa to unlock the full potential of its hydrocarbon resources, governments must deepen regulatory reforms, promote fiscal transparency and align investment incentives with global standards, while also building regional partnerships to share critical infrastructure and mitigate security threats.
