Africa’s oil and gas sector loses billions due to structural infrastructure gaps
Africa’s oil and gas sector continues to lose billions in potential revenue due to chronic infrastructure gaps and structural weaknesses, according to a new report from Deloitte.
The Africa Oil & Gas Outlook 2025 report from Deloitte highlights how, across much of the continent, the lack of pipelines, refineries, storage facilities, and transport networks continues to hinder the monetisation of Africa’s abundant oil and gas resources.
“Despite having significant reserves, many parts of Africa lack the basic infrastructure required to monetise those resources effectively. Costs increase and timelines extend when key support systems such as drilling rigs, pipelines, marine vessels, and storage facilities are unreliable or unavailable,” the report stated.
In Nigeria, Africa’s top oil producer, infrastructure challenges remain widespread across onshore, shallow-water, and deepwater terrains. In Angola, where offshore production dominates, the government has begun tackling logistical bottlenecks that have long weighed on project economics.
Similarly, in other countries assessed, limited road and pipeline networks for onshore production plants lead to production delays and higher operating costs.
Five main challenges
Across Africa, Deloitte’s researchers identified five interlinked challenges that hamper the industry: 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.
Capital remains the most pressing factor
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 continue to operate with deep financial buffers and globally diversified portfolios, African independents face tightening margins and growing investor hesitancy,” the authors stated.
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.
“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.
A coordinated effort
Without coordinated investment in midstream and downstream infrastructure, the continent risks missing out on the benefits of rising global demand for oil and gas.
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.
“Infrastructure is the backbone of the energy value chain. To unlock Africa’s full oil and gas potential, governments and investors must prioritise long-term infrastructure development alongside exploration and production,” the report concluded.
