African M&A: Oil & gas deals heating up. discover the latest trends
African M&A: what are the prospect for oil & gas deals this year?
The events of the past two years have accelerated mergers & acquisitions trends in Africa, with 2022 setting a new pace in the number and value of deals on the continent. Since then, deal-making seems to have slowed, with activity in 2023 focused more on completing current transactions rather than originating new ones. However, the recent acquisition by Perenco of some of Eni’s assets offshore Congo is a reminder that, behind closed doors, African assets continue to generate interest.
A focus on brownfield assets in West and Central Africa
In the mature petroleum provinces of West and Central Africa, deals are focused on brownfield opportunities. These include both producing fields with strong upside potential, or appraisal and near-producing assets where barrels can be produced and exported in a short timeframe with capex.
Several such transactions have occurred since 2020 and are still happening. The recent deal by Perenco to acquire some of Eni’s assets offshore Congo-Brazzaville is a perfect example and follows similar deals by Perenco in Gabon and the DRC since 2020.
Similarly, the acquisition earlier this year of Aker Energy AS by AFC Equity Investment Ltd, part of the Africa Finance Corporation follows a similar pattern. Aker Energy is operator of the Pecan offshore project in Ghana, where discoveries have been made and appraised. Pecan will be Ghana’s biggest offshore project in many years and is critical to reversing the country’s production decline.
A Focus on play opening assets in Southern Africa
While risk appetite for new assets in West and Central Africa is relatively low, it is considerably higher in frontier basins in Southern Africa. This is particularly the case in Angola (Namibe and Kwanza Basins), Namibia (Kavango, Walvis Bay, and Orange Basins), and South Africa (Orange Basin), but also in Zimbabwe (Cabora Bassa Basin).
Namibia and South Africa have become exploration hotspots and are both driving significant M&A activity now. This is especially the case within the Orange Basin, where both Shell and TotalEnergies have announced world-class discoveries.
2022 already saw several deals in the Orange Basin, which continued in 2023 with Woodside Energy considering an entry into PEL 87, operated by Pancontinental Energy.
The rise of the independents
2023 will further entrench the rise of established and new independents across the continent as they continue to top the list of buyers.
The biggest deal this year so far is the acquisition, by Angolan independent Somoil, of Galp Angola for some $830. The deal includes interests in key producing assets such as Block 14 (9%), Block 14K (4.5%), and Block 32 (5%).
On the back of brownfield opportunities, a new generation of local and international independents is set to shape the region’s energy landscape, from Egypt and Tunisia to Equatorial Guinea, Congo, and Namibia. Companies like the Africa Oil Corp, Afentra, Tende Energy, Savannah Energy, Panoro Energy, Maurel et Prom, Petralon Energy or VAALCO Energy are all players whose presence is set to grow on the continent this decade.
Nigeria’s deals pipeline needs debottlenecking
Meanwhile, several key deals announced over the past few years remain uncompleted or stuck, especially in Nigeria. With the arrival of a new administration that is more business-friendly, hopes are that landmark transactions could be coming through.
This notably includes Seplat Energy’s acquisition of Mobil Producing Nigeria, a $1.283bn transaction announced last year. The deal ran through headwinds but could see Seplat Energy tripling in size if approved and completed.
Shell’s divestment from its entire JV portfolio in the country, which was put on hold last year, could drive further M&A if the process resumes. 30% interest in 18 oil mining leases (OMLs) onshore and in shallow water are up for grab. TotalEnergies also said it was divesting its minority interest in the SPDC JV, while Reuters reported at the start of the year that Equinor was looking at selling its own offshore assets in the country.
Within the region, Nigeria will continue to drive M&A activity, first because of continued divestments by IOCs but also because of the size of its proven reserves.
Africa Oil Week 2023
Under the theme "Maximising Africa's Natural Resources in the Global Energy Transition" Africa Oil Week 2023 will welcome over 50 ministers and government officials alongside the industry's global leaders and be the hub for building a sustainable African upstream this October.
Don't miss out on joining 1800+ senior industry decision makers as they come together at Africa's most established and prestigious upstream event.
The events of the past two years have accelerated mergers & acquisitions trends in Africa, with 2022 setting a new pace in the number and value of deals on the continent. Since then, deal-making seems to have slowed, with activity in 2023 focused more on completing current transactions rather than originating new ones. However, the recent acquisition by Perenco of some of Eni’s assets offshore Congo is a reminder that, behind closed doors, African assets continue to generate interest.
A focus on brownfield assets in West and Central Africa
In the mature petroleum provinces of West and Central Africa, deals are focused on brownfield opportunities. These include both producing fields with strong upside potential, or appraisal and near-producing assets where barrels can be produced and exported in a short timeframe with capex.
Several such transactions have occurred since 2020 and are still happening. The recent deal by Perenco to acquire some of Eni’s assets offshore Congo-Brazzaville is a perfect example and follows similar deals by Perenco in Gabon and the DRC since 2020.
Similarly, the acquisition earlier this year of Aker Energy AS by AFC Equity Investment Ltd, part of the Africa Finance Corporation follows a similar pattern. Aker Energy is operator of the Pecan offshore project in Ghana, where discoveries have been made and appraised. Pecan will be Ghana’s biggest offshore project in many years and is critical to reversing the country’s production decline.
A Focus on play opening assets in Southern Africa
While risk appetite for new assets in West and Central Africa is relatively low, it is considerably higher in frontier basins in Southern Africa. This is particularly the case in Angola (Namibe and Kwanza Basins), Namibia (Kavango, Walvis Bay, and Orange Basins), and South Africa (Orange Basin), but also in Zimbabwe (Cabora Bassa Basin).
Namibia and South Africa have become exploration hotspots and are both driving significant M&A activity now. This is especially the case within the Orange Basin, where both Shell and TotalEnergies have announced world-class discoveries.
2022 already saw several deals in the Orange Basin, which continued in 2023 with Woodside Energy considering an entry into PEL 87, operated by Pancontinental Energy.
The rise of the independents
2023 will further entrench the rise of established and new independents across the continent as they continue to top the list of buyers.
The biggest deal this year so far is the acquisition, by Angolan independent Somoil, of Galp Angola for some $830. The deal includes interests in key producing assets such as Block 14 (9%), Block 14K (4.5%), and Block 32 (5%).
On the back of brownfield opportunities, a new generation of local and international independents is set to shape the region’s energy landscape, from Egypt and Tunisia to Equatorial Guinea, Congo, and Namibia. Companies like the Africa Oil Corp, Afentra, Tende Energy, Savannah Energy, Panoro Energy, Maurel et Prom, Petralon Energy or VAALCO Energy are all players whose presence is set to grow on the continent this decade.
Nigeria’s deals pipeline needs debottlenecking
Meanwhile, several key deals announced over the past few years remain uncompleted or stuck, especially in Nigeria. With the arrival of a new administration that is more business-friendly, hopes are that landmark transactions could be coming through.
This notably includes Seplat Energy’s acquisition of Mobil Producing Nigeria, a $1.283bn transaction announced last year. The deal ran through headwinds but could see Seplat Energy tripling in size if approved and completed.
Shell’s divestment from its entire JV portfolio in the country, which was put on hold last year, could drive further M&A if the process resumes. 30% interest in 18 oil mining leases (OMLs) onshore and in shallow water are up for grab. TotalEnergies also said it was divesting its minority interest in the SPDC JV, while Reuters reported at the start of the year that Equinor was looking at selling its own offshore assets in the country.
Within the region, Nigeria will continue to drive M&A activity, first because of continued divestments by IOCs but also because of the size of its proven reserves.
Africa Oil Week 2023
Under the theme "Maximising Africa's Natural Resources in the Global Energy Transition" Africa Oil Week 2023 will welcome over 50 ministers and government officials alongside the industry's global leaders and be the hub for building a sustainable African upstream this October.
Don't miss out on joining 1800+ senior industry decision makers as they come together at Africa's most established and prestigious upstream event.
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