2024 was a very busy year for mergers and acquisition (M&A) in Africa. First, Adam Blythe looks at the Anglophone region in Sub-Saharan Africa, where foreign divestment of oil and gas assets is creating ‘significant opportunities’ for indigenous companies.

‘What were the reasons behind some of that activity?’ he asks.

Apparently, there was no single ‘monster deal’. Instead, there were numerous deals of significant value, around the $500mn mark, and many deals of this kind across the breadth of Africa. ‘Of course, every deal is unique and Africa is a wide and diverse continent, so many factors lay behind these deals,’ he remarks.

Blythe highlights four key issues.

Both Angola and Nigeria saw significant deal activity in 2024, with common drivers due to changes in the fiscal and regulatory environment. ‘In both those countries over the last five years or so there have been significant reforms to both their legal and fiscal environments. Those reforms are now bedded in, and because of the certainty and understanding that now exists, conditions have been created that enable deals to happen,’ he explains.

Nigeria saw five significant deals completed in 2024 (see Box), along with the establishment of a new upstream regulator – the Nigerian Upstream Petroleum Regulatory Commission established in 2021 – and a new government approval procedure, which has been used to navigate the process in the recent deals.

‘Admittedly, at times that was a long, bumpy journey but ultimately has culminated in five successful deals – all significant deals with large ticket values, involving sophisticated counterparties and international and regional lenders,’ says Blythe. And concurs that ‘the conditions are right for more deals to happen’.

Secondly, both Nigeria and Angola have promoted and largely delivered on transitionary change in the makeup of their industry participants. Blythe highlights: ‘There has been significant scaling up in the positions held by indigenous companies or independents expanding their existing footprint. These deals represent a “changing of the guard”, particularly offshore Nigeria, where we can now see Nigerian companies are the dominant operator [of oil and gas fields].’

What’s more, he recognises dealmaking that demonstrates ‘an incoming class of buyer that has been able to successfully transact and raise complex, multi-source financings to fund their acquisitions, proving up their credibility’.

Thirdly, and as a counterpart in this transitional phase, there is a continued role for the majors. ‘We see continued portfolio management by the majors who remain large acreage holders across the [African] continent. But over the last five years or so, [they] have embarked on a process to sell down non-core assets. Though this process has continued, we are largely seeing it come to a conclusion – not just in Nigeria and Angola, but in many countries across the continent; most recently in the Congo through Chevron’s country exit [in 2024].’

Fourthly, Bracewell continues to see an evolving cast of buyers across the continent, now involving indigenous buyers.

‘Admittedly, at times that was a long, bumpy journey but ultimately has culminated in five successful deals [in Nigeria] – all significant deals with large ticket values.’ – Adam Blythe, Bracewell lawyer

Blythe also mentions two further trends. ‘Firstly, national oil companies (NOCs) were especially busy and acquisitive – acting extra-territorially [outside their own countries, including in the United Arab Emirates and Brazil] and looking at assets in Africa.’

For example, ADNOC acquired a large position in Area Four in Mozambique and assets in Egypt. While Qatar Energy bought assets in South Africa and Brazil’s Petrobras bought a 10% stake in an offshore oil block in South Africa. The latter wants to buy stakes in further African oil assets, mainly in Angola, Namibia and South Africa, according to Reuters.

‘This demonstrates that certain NOCs have the firepower available to deploy and are looking to grow their reserves and production flows beyond their own borders, and see opportunities to do this in Africa,’ says Blythe.

Secondly, there was the return of M&A activity in relation to exploration and appraisal prospects, ‘which was not something we’ve seen over the last 5–10 years,’ he comments.

These prospects are concentrated on ‘world class opportunities’ in Namibia, which is considered to be one of the world’s largest recent oil discoveries. They are under development by TotalEnergies, in the Orange Basin off the coast of Namibia – following its Venus-1 and Shell’s Graff-1, La Rona-1 and Jonker-1 discoveries. This resulted in many new deals in the region in 2024, where the buyers were largely oil and gas majors attracted to huge prospective developments, using M&A in lieu of actual exploration activity to develop new reserves in complicated upstream developments.

Looking forward, Blythe suggests a note of caution. ‘Though the conditions and factors that lay behind deals in 2024 may continue to be relevant in 2025, I suggest caution when using 2024 as a predictor. Overall deal levels in 2025 may be slightly depressed from last year. I think the prevailing issue, which is not unique to Africa, is the need for stability in the oil price. 2024 saw relatively low volatility when it came to commodity prices, and oil remained at the strong end of its price range, at least in the post-COVID period… Having that same stability is going to be an essential factor to M&A activity in 2025. Although I avoid crystal ball gazing!’

Another key factor is finance. ‘There will be the systemic challenge that the industry faces through the availability of sources of capital,’ notes Blythe.

Fellow Bracewell lawyer Jason Fox explains that there were ‘some causes for optimism’ in this respect in 2025; given the evidence of 2024, the right deals will find funding. However, Blythe recognises that many of the buyers for African assets will require external funding to support their deals… ‘and the continent remains a challenge, which will be a key factor that influences M&A activity going forward’.

Francophone Africa M&A activity  
Bracewell lawyer Simon Cudennec, based in Paris, focuses on some of the complex government and regulatory factors that impact M&A deal making in Francophone Africa.

He identifies two more trends which will impact in 2025. Firstly, he sees a distinct increase in state interventions and resource nationalism in the region in 2024.

‘Gabon, in particular, shocked the industry by pre-empting oil assets,’ he says, in a state takeover of Carlyle’s Assala Energy Holdings and subsidiaries’ oil assets – following a coup in August 2023. ‘This move is part of a broader government effort to reassert control over the country’s natural resources and capture all that value for the sector. However, such a decision creates uncertainties for international investors.’

‘Furthermore, beyond Gabon, similar trends are visible in Francophone Africa, where governments are renegotiating terms with foreign companies to secure a larger share of profits,’ continues Cudennec ‘Governments are also exploring greater participation in existing contracts with NOCs pushing for operational control or larger equity stakes in joint ventures. Several countries are actively increasing the role of state-run entities in the upstream sector, reflecting a broader ambition for resource sovereignty. This approach aligns with the push to ensure that resources will directly benefit local economies and also has an impact on the stability for oil and gas companies investing in these countries.’

Secondly, Cudennec looks at the challenges around CEMAC – the Economic and Monetary Community of Central Africa, comprising Cameroon, the Central African Republic, Chad, the Congo, Equatorial Guinea and Gabon – which provides a unified regulatory framework, particularly in relation to the foreign exchange region, regarding the repatriation of funds designated for the restoration of mining and oil and gas sites.

‘These companies are now required to promptly return foreign exchange earnings to the region, with a deadline set for 30 April 2025, and to sign agreements for the sequestration of these funds locally,’ explains Cudennec. These measures aim to bolster CEMAC’s foreign exchange reserve and improve stability to the common currencies of the Central African (CFA) franc (XAF) by ensuring that funds held outside the region are brought back onshore. ‘However, despite this regulatory push, challenges remain in enforcing compliance due to production sharing contract stipulations and several practical issues,’ he says. [Note: Each country is free to leave the franc zone. And in fact, the Union of Comoros uses the Comorian franc (KMF).]

On 16 December 2024 Cameroon hosted an ‘extraordinary session’ at the Conference of Heads of State of the CEMAC. The main topic was an evaluation of the region, in terms of the economic, monetary and financial situation, with a focus on strengthening the region and resilience. ‘The session highlighted various challenges, such as high debt levels, growing budgetary and external imbalances, and the lack of economic diversification and government issues,’ remarks Cudennec.

‘More importantly for the oil and gas sector, they also re-affirmed requirements for oil and gas companies to repatriate foreign exchange funds by April 2025. This measure is expected to significantly boost the region’s financial stability and reserves but also creates challenges for oil and gas companies in region,’ he adds.

Furthermore, actions like Gabon’s pre-emption of assets, and the regulatory complexity within the CMAC region, are prompting concerns among a lot of oil and gas companies.

Cudennec emphasises that the global oil and gas market will ‘obviously’ determine production strategies in Francophone Africa. ‘While oil prices provide a revenue boost, variations can destabilise economies heavily reliant on oil revenues and have an impact on potential transactions in the sector. Finally, political instability in the region and security threats to oil and gas infrastructure continues to push challenges in several of the Francophone countries.’ 

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