Nicolas Lippolis
This article is part of NRGI’s 20th anniversary reflection series on the future of natural resource governance and was originally published on the National Resource Governance Institute blog on June 23, 2026.
Foto: Ikechi Ugwoeje / Shutterstock via NRGI
The accelerating global energy transition has placed national oil companies (NOCs) under growing scrutiny. NRGI, among other civil society organizations, has extensively documented NOCs’ exposure to transition risks, including potentially stranded assets, long-term demand contraction, and tightening access to external finance. At the same time, it is increasingly acknowledged that NOCs can also play a constructive role in the energy transition by leveraging their capabilities to support decarbonization and broader economic transformation.
To unlock their potential to deliver both economic transformation and just energy transitions, African NOCs require tailored, nuanced analysis. Unlike in many other regions, NOCs in Sub-Saharan Africa function primarily as sector regulators rather than integrated operators. Their historical mandate has been to maximize state revenues and ensure domestic energy supply, including through the development of mid- and downstream sectors—but not necessarily to lead technological innovation efforts. This difference is essential for understanding how these companies have responded to the sector’s transformations and what paths lie open before them.
Today, African NOCs find themselves at the intersection of several powerful trends. Governments across the continent continue to face urgent development priorities, including expanding energy access, supporting industrialization, and generating fiscal revenues. These pressures help explain why many governments continue to view hydrocarbons as part of their development pathway, even as the global energy transition accelerates and questions are raised regarding the long-term viability of hydrocarbon-based development strategies.
At the same time, many international oil companies (IOCs) have been retreating from African upstream assets due to declining basin attractiveness, portfolio reassessments, and, in some cases, challenging operating environments. This changing landscape makes the strategic choices facing African NOCs more consequential than ever.
Financing choices in reaction to a changing global energy landscape
Recent IOC divestments from mature hydrocarbon assets in Sub-Saharan Africa have produced two broadly distinct classes of response, depending on the size and institutional maturity of producer countries.
In smaller producers, NOCs have been mobilized to take over oil blocks vacated by IOCs. The risks here are considerable and, in some cases, already materializing. A notable case is that of the Gabon Oil Company’s (GOC) US$1 billion acquisition of six oil blocks from Assala Energy. The deal was financed through an oil-backed loan from commodity trader Gunvor that granted the trader unusual latitude over pricing and cost calculations, and has added further financial stress to a state already allocating over half its expenditures to debt service.
In a smaller but structurally similar arrangement, in the Republic of Congo, the SNPC (National Petroleum Company of Congo) has reportedly contracted a US$200–300 million loan from Geneva-based trader Mercuria to acquire Eni’s rights over the M’Boundi oil field. The transaction has attracted criticism—observers argue that SNPC is assuming control of a mature and potentially declining asset despite lacking the technical and financial capabilities needed, meaning the acquisition could prove more burdensome than profitable.
An even more brazen transaction was avoided in Ghana in July 2021, when a coalition of civil society organizations successfully opposed the Ghana National Petroleum Corporation’s proposed US$1.65 billion acquisition of Aker Energy’s offshore assets after uncovering a Bank of America appraisal valuing the oil field at just US$300 million. The asset was eventually reverted to Ghana at no cost, further underscoring the potential harm of the proposed deal.
Senegal, a new producer, has so far not replicated this approach, despite some signs of increased NOC ambition. Following the exit of BP and Kosmos Energy from the Yakaar-Teranga gas field, Petrosen has expressed interest in taking over the project. However, the financial commitments and technical requirements involved appear to exceed the Senegalese state’s current capabilities, particularly considering its worsening sovereign debt crisis. Its delicate financial situation has, however, not held it back from announcing ambitions to engage in onshore exploration or to build a new refinery. Supporters of a greater role for Petrosen argue that increased national participation could help secure domestic gas supplies, support gas-to-power ambitions, and capture a larger share of future project revenues.
Responses in mature oil economies: Nigeria and Angola
Responses differ in Sub-Saharan Africa’s two largest producers, which possess the region’s most mature oil sectors. While some companies are pursuing corporatization and commercial restructuring, others remain primarily regulatory entities with limited operational responsibilities and very different reform priorities.
In response to declining production and subdued IOC investment, the Angolan and Nigerian governments introduced legislative reforms—in 2019 and 2021, respectively—that established more arm’s-length relationships between NOCs and oil sector policymaking. This was a deliberate effort to reduce the conflation of regulatory and commercial functions that had historically characterized both Sonangol and NNPC (formerly “Nigerian National Petroleum Corporation”). Besides improving the credibility of oil sector reforms, the “corporatization” of the two NOCs is intended as a first step toward eventual access to domestic stock markets and international private capital.
The results have been uneven. In Nigeria, the NNPC was restructured into a limited liability company (“Nigerian National Petroleum Company Limited”) in 2022, though it remains entirely government-owned, with no set date for the proposed stock market listing. NNPC’s corporatization has nonetheless been accompanied by improvements in corporate disclosures and the creation of a new Sustainability Department, which, together with a strengthened NNPC New Energy Limited (NNEL) subsidiary, is leading efforts to respond to the decarbonization of the global economy.
In Nigeria, natural gas sits at the center of energy transition policy. Accordingly, NNPC has recently published a Gas Master Plan intended to support the government’s Decade of Gas agenda through gas commercialization, infrastructure development, power generation, gas-based industrialization, liquefied petroleum gas (LPG) expansion, and the elimination of routine gas flaring. However, upstream hydrocarbon production has been disappointing, leading to a wholesale change in the company’s leadership and board in 2025.
The corporatization of Angola’s Sonangol, largely considered the region’s most competent NOC, has also faced some hiccups. Sonangol’s role in Angola’s oil economy was significantly downsized following the creation of a new regulatory agency in 2019 and the divestment of most of its assets in non-core areas of activity, allowing the company to focus on obtaining better value from core commercial operations. Yet while Sonangol’s profitability has improved, the promised domestic listing of 30 percent of its shares has been repeatedly postponed, with the latest date set for 2027. The listing process has been complicated by the challenges of advancing corporate governance reforms, rationalizing an oversized workforce, and reconciling commercial objectives with Sonangol’s continued involvement in strategic public investment projects such as refineries and oil storage terminals. Together, these activities underscore the company’s enduring role as a central instrument of state policy (Heller, 2011).
Sonangol’s strategic role is also reflected in its growing involvement in the new “green economy.” The company has built two solar power plants, in partnership with Azule Energy (a BP–Eni joint venture) and TotalEnergies, respectively. It has also acquired licenses to explore for critical minerals, reflecting Angola’s growing ambitions for the sector. These initiatives reflect a broader trend among some African NOCs to explore opportunities beyond traditional oil and gas activities, although the commercial viability and strategic coherence of such diversification efforts remain uncertain.
The Way Forward for African NOCs
Variations in the recent trajectories of African NOCs suggest that the way forward is not uniform, but is best conceived as a gradient that tracks the institutional development of each company. Any assessment of African NOCs should recognize that the continent faces a dual challenge: managing transition-related risks and opportunities while simultaneously addressing persistent energy poverty and infrastructure deficits. Effective reform strategies will therefore need to balance long-term climate considerations with near-term development and energy security objectives.
As shown by questionable investments in Gabon, Ghana, and Congo, the classic transparency agenda promoted by NRGI remains essential for less institutionally consolidated NOCs, where companies must increase the transparency of their oil sales, improve oversight of their activities, and strengthen corporate governance.
Tackling the NOC-commodity trader nexus could also go a long way toward preventing some of the most harmful transactions. Reform programs could address areas such as procurement, contract management, and revenue administration. In particular, it is important to strengthen regulatory and legal frameworks related to the selection of buyers, terms of sale negotiations, and contract awards for the sale of host states’ equity oil and the oil allocated to them in production sharing agreements. Rather than aspiring to wide-ranging governance reform, such targeted interventions would directly tackle sources of fiscal and illicit financial flow risk.
The challenges look quite different in the larger oil economies such as Angola and Nigeria, where IOC divestments have been relatively limited in the former or mostly taken over by domestic private operators in the latter. For both Sonangol and NNPC, the main challenge is to deliver on the mandates set by oil sector reforms and advance in their corporatization. This will entail introducing rigorous reporting standards, enhancing transparency and disclosure requirements, strengthening corporate governance mechanisms, and securing greater operational autonomy from political authorities, while reducing the influence of patronage structures that have historically shaped both companies. Here, African NOCs can draw valuable lessons from other NOCs that have undergone partial stock market listings, including Brazil’s Petrobras, Colombia’s Ecopetrol, and Norway’s Equinor.
At the same time, Sonangol and NNPC face the unique challenge of advancing their corporatization while still playing limited roles as operators and, in the case of Angola, facing projected declines in oil and gas production. Moreover, they are reforming at a time of heightened awareness of the risks posed by climate change and the global energy transition, which threaten their core business while also creating new opportunities for diversification.
In conclusion, there is no “one-size-fits-all” path to harness the full potential of African NOCs. Further nuanced research is essential, and could deepen comparative analysis across African producers, identifying lessons from both successful and unsuccessful reform experiences and examining how different institutional models affect transparency, financial performance, and resilience to energy transition risks.
Beyond research, the continued engagement between policymakers and civil society groups at national, regional, and global levels will be critical for progress. With its 20-year track record of combining robust analysis with trusted engagement, NRGI will no doubt remain an important source of comparative knowledge and a model for other civil society organizations seeking to promote the management of natural resources in the service of shared and sustainable prosperity.
