Middle Eastern countries are increasingly focusing on Africa’s energy assets, with deals or interests totaling at least $6 billion in recent weeks.
This marks a significant rise in investment from Gulf states, signaling a broader strategy to expand their presence and influence across the continent’s growing energy market.
One of the main players is Abu Dhabi National Oil Co. (Adnoc), which has been shortlisted for the acquisition of Shell Plc’s downstream assets in South Africa, a deal valued at around $1 billion.
Adnoc, along with other UAE-based firms, has shown strong interest in both renewable energy and oil fields throughout Africa, reflecting the Gulf’s growing involvement in the continent’s energy transition.
This surge in activity comes at a time when Gulf states are increasing their investments in Africa, with trade between the UAE and the continent rising 38%, reaching $86 billion over two years, according to the African Export-Import Bank.
The Gulf’s growing interest in African energy assets is part of a broader effort by these countries to diversify their oil and gas portfolios.
These nations are seeking to buffer against market volatility and regional instability by acquiring energy assets outside their borders.
For example, Alpha MBM Investments LLC, a Dubai-based private investment firm led by a member of the emirate’s royal family, recently signed a deal with Uganda to build a 60,000-barrel-per-day refinery.
Alpha MBM will hold a 60% stake in the $4 billion project, which is a renewed attempt to capitalize on Uganda’s landlocked crude reserves, following previous unsuccessful initiatives.
In addition, Kenya has extended its fuel import agreement for another two years with Adnoc, Saudi Aramco, and Emirates National Oil Co.
This agreement has helped stabilize the Kenyan shilling, with some of the imported fuel being re-exported to neighboring countries such as South Sudan, the Democratic Republic of Congo, and Burundi.
Saudi Arabia has been active in securing major energy deals, especially in South Africa.
Over the past year, high-level engagements have led to multibillion-dollar deals, with further corporate activities expected.
Saudi firms, including ACWA Power and Red Sea Gateway Terminal, are actively bidding for assets in South Africa’s renewable energy sector.
Saudi Arabia, through its sovereign wealth fund, which has a portfolio of $925 billion, holds a 44% stake in ACWA Power, making it the largest investor in South Africa’s renewable energy industry, according to Standard Bank Group.
This growing wave of investment from the Gulf underscores the strategic importance of Africa’s energy sector, both in terms of securing long-term energy assets and as a buffer against the volatility that affects regional energy markets.
