Innovative Financing Reshapes African NOCs’ Oil and Gas Ambitions

Similarly, other NOCs across the continent are exploring partial privatization and strategic asset sales to free up capital for reinvestment into exploration and production.

African national oil companies (NOCs) are adopting a diverse set of innovative financing strategies to maintain and expand their operations in the face of changing global energy dynamics. These methods, which include privatization, bond issuances, joint ventures, and resource-backed loans, are enabling NOCs to raise capital, improve financial stability, and solidify their roles in the continent’s energy development. As they navigate increasingly complex markets, these companies are demonstrating a newfound resilience, attracting international partners, and opening new opportunities for investment across the African hydrocarbon landscape.

Privatization and Divestment Drive Efficiency and Investment

One of the most significant trends among African NOCs is the move toward privatization and asset divestment. By selling off non-core assets and exploring partial privatization, NOCs can streamline operations, generate essential revenue, and attract private sector investment. Angola’s state oil company Sonangol has embraced this approach, announcing plans to offer up 30% of its shares to private investors. This move is part of a broader effort under the government’s Propiv initiative, aimed at fostering a more open and competitive market. The initiative includes various mechanisms such as public tenders and initial public offerings (IPOs) to engage private capital and inject efficiency into Sonangol’s operations.

Similarly, other NOCs across the continent are exploring partial privatization and strategic asset sales to free up capital for reinvestment into exploration and production. By introducing private sector competition, they aim to enhance productivity and establish a more dynamic energy sector.

Capital Markets: Bonds and Beyond

In addition to privatization, many African NOCs and governments are turning to international capital markets to secure long-term funding for large-scale projects. Bond issuances have emerged as a key tool for financing infrastructure, exploration, and development activities. For instance, the Nigerian government issued a $900 million domestic dollar bond in 2024 through the Africa Finance Corporation, which served as the Global Coordinator. This groundbreaking issuance saw 180% oversubscription, reflecting strong investor confidence in Nigeria’s energy prospects. Furthermore, the country successfully floated a $1.7 billion Eurobond that was oversubscribed five times, providing additional resources to advance oil and gas initiatives.

These successes have set a precedent for other African nations, showing that well-structured bond offerings can attract significant investor interest, even in challenging market conditions. By leveraging international capital markets, African NOCs are enhancing their ability to finance critical projects, foster economic growth, and support energy security.

Joint Ventures: Sharing Risk, Building Expertise

Joint ventures (JVs) have become another effective method for African NOCs to finance projects and tap into international expertise. Through partnerships with global oil companies, NOCs can spread financial risk while gaining access to advanced technologies and industry know-how. In Ghana, the Ghana National Petroleum Corporation (GNPC) has pursued JVs with companies like Eni to develop major oilfields such as Jubilee and TEN. These collaborations have accelerated project timelines, increased production capacity, and boosted revenue streams.

In Libya, JVs have played a pivotal role in maintaining and expanding production levels. Mellitah Oil & Gas, a partnership between Libya’s NOC and Eni, achieved daily production rates of 403,000 barrels in 2024. Akakus Oil Operations, another JV involving Libya’s NOC and Repsol, set a new production record in 2025 with 306,000 barrels per day. These partnerships not only enhance the operational efficiency of African NOCs but also attract foreign investment, driving the overall growth of the continent’s oil and gas sector.

Resource-Backed Loans and Development Finance

As traditional financing avenues become more challenging, African NOCs are increasingly relying on resource-backed loans and development finance to support their projects. These mechanisms provide upfront capital in exchange for future production revenues, offering a lifeline for companies navigating tight financial conditions. Nigeria’s state-owned oil company, for example, has secured a $2 billion oil-backed loan structure to fund production growth, with the first tranche of $1 billion already completed. This approach not only boosts liquidity but also helps maintain steady output levels in the face of market fluctuations.

Mozambique’s national oil company, ENH, has also leveraged development finance to push forward its ambitious LNG projects. The $20 billion Mozambique LNG project, for instance, is backed by a $4.7 billion loan from the U.S. Export-Import Bank, alongside $3 billion in financing from Japan’s Bank for International Cooperation. These substantial funding packages ensure that Mozambique can remain a key player in the global LNG market, even as competition intensifies.

Elsewhere, Uganda and Tanzania’s NOCs are pursuing a $3 billion debt package from Chinese lenders to finance the East African Crude Oil Pipeline. By tapping into development finance institutions and resource-backed arrangements, African NOCs can secure the funding necessary to unlock new production opportunities and advance large-scale infrastructure projects.

The Road Ahead: Unlocking African Energy Potential

With innovative financing strategies at the core of their operations, African NOCs are well-positioned to navigate the complexities of today’s global energy landscape. The African Energy Week conference, scheduled for September 29 to October 3 in Cape Town, will provide a platform for stakeholders to explore these strategies in greater depth. By bringing together international financiers, development institutions, foreign operators, and African NOCs, the event aims to catalyze a new wave of investment and innovation in the continent’s energy sector.

As African NOCs continue to adapt, their efforts are not only securing much-needed capital but also driving the continent toward energy independence, economic growth, and a more resilient hydrocarbon industry. Through bold, forward-looking approaches, these companies are shaping the future of Africa’s oil and gas sector, ensuring that the region remains a vital contributor to the global energy landscape.