Onshore drilling is expected to accelerate – and drive overall drilling activity – in Africa in 2024, according to the African Energy Chamber’s latest 2024 Outlook Report, produced in partnership with Rystad Energy. While onshore exploration has always comprised the higher proportion of drilling activity on the continent – with an approximate 80-20 split – it is set to play an even more dominant role in Africa’s energy landscape. Featuring lower costs and reduced barriers to entry, onshore drilling and its associated uptick underscores the industry’s focus on unlocking untapped and marginal resources and attracting new E&P players to Africa’s exploration scene.
Onshore Dominance and Growth Trajectory
In 2020, a total of 810 wells were drilled in Africa, of which around 80% were onshore. Fast forward to 2024 and this number is set to break the 1,000-well mark, representing a five percent year-on-year growth. This surge is associated with an increase in onshore drilling primarily in North and East Africa. The onshore-offshore split is projected to maintain an 80-20 ratio through 2024, signifying a strategic focus on harnessing onshore resources and showcasing the industry’s confidence in the potential of inland hydrocarbon reserves. In 2025, an estimated 960 wells are projected, however, considering well performance versus actual supply, the count is anticipated to drop to around 715 wells, with 82% onshore and 18% offshore.
Rig Demand Reflects Growth
The rise in drilling activity correlates with increased demand for drilling rigs. From 28 rigs per year in 2020, the demand is set to reach 44 rigs in 2024—a sizable 55% growth. This figure is attributed to projects returning to Africa post-pandemic, demonstrating the resilience and forecast growth of the region’s energy sector. That said, the report highlights the need for sustained upstream investment and the sanctioning of new projects – the lack thereof could hamper production goals and impact rig demand.
Over the period 2023–2025, an estimated 375 wells are expected to be drilled on the continent, with Algeria and Egypt leading the charge in onshore activity. The projected annual exploration well count is 132 for 2023, 120 for 2024 and 123 for 2025. Approximately two-thirds of these wells are anticipated to be onshore, while slightly over one-fifth are estimated to be in deep waters off the coast of Africa.
Emerging and Mature Markets Take the Lead
According to the report, onshore drilling in emerging oil and gas markets like Uganda and Kenya are being driven by greenfield projects. In Kenya, for example, Phase 1 of the South Lokichar Development is currently in its approval stage, with the final investment decision slated for 2024. The first phase of this onshore conventional oil development will involve the drilling of an estimated 321 wells.
Meanwhile, mature oil and gas markets in North Africa are leading drilling activities through brownfield projects. In Algeria, rig count is expected to increase from 50 in 2023 to 80 in 2027, with the number of wells drilled rising from 162 to 236, and utilization climbing from 31% to 50%. Successful onshore campaigns in-country include the Touat Conventional Gas Field, operated by Groupement TouatGaz and currently in production, and the associated Touat Phase 2 expansion project, which is currently in its feasibility stage and scheduled to commence in 2026. The field has recovered 4.19% of its total reserves, with peak production anticipated in 2024.
Meanwhile, Egypt is allocating over $1.5 billion to drill 35 new natural gas wells over the next two fiscal years, covering both on- and offshore acreage. Last October, the country saw the successful start of production from the ED2-X ST1 well in the East Damanhur block in the onshore Nile Delta, strategically located near existing infrastructure at Disouq and thereby achieving a swift tie-back.
Looking ahead, Africa’s onshore drilling hotspots are expected to emerge at the center of the continent’s energy resurgence. As the industry surges forward, sustained investments, new project approvals and diversified exploration activities will be crucial in maintaining its upward trajectory and ensuring a robust energy future.
