By Sandra Kyoshabire
While the world debates whether to abandon fossil fuels or double down on them, one thing is clear: global investment in oil and gas is not only alive, it is making a strong comeback.
At COP26, it would have been unimaginable to predict such a turnaround in just four years. Almost all of the top 60 global banks had pledged to cut funding for fossil fuel projects in line with commitments to meet the net-zero targets outlined in the Paris Agreement. Yet, fossil fuel financing surged by more than 20% to US$869 billion in 2024, the first annual increase since 2021, according to the Banking on Climate Chaos annual report. That represents a US$162 billion year-on-year increase, a stark reversal for many banks that had joined the Net-Zero Banking Alliance (NZBA) to align their lending activities with net-zero greenhouse gas emissions by 2050.
“Even in the face of worsening disasters and increasingly dire warnings from scientists and policy experts, banks actually increased their financing to fossil fuels between 2023 and 2024 and still poured billions into expanded fossil infrastructure,” noted Allison Fajans-Turner, Policy Lead at Rainforest Action Network and co-author of the report.
Several factors have contributed to this reversal. The change in the United States’ political climate following the return of President Donald Trump, whose opposition to environmental lobbyists is well known, and the energy security crisis in Europe triggered by the Russia–Ukraine war, has reshaped priorities. These shifts have led major financial institutions to rethink their positions. Several banks that once led the NZBA, including JP Morgan Chase, Bank of America, and Mizuho Financial, were among the biggest backers of fossil fuel projects in 2024.
This change in sentiment is already driving a surge in licensing for new exploration frontiers, as major oil producers move to close the gap created by rising demand, which is projected to double by 2030. Recently, Norway launched its 26th oil and gas licensing round in unexplored frontier areas to boost exploration and offset an anticipated decline in production from the early 2030s.
“Norway intends to be a long-term supplier of oil and gas to Europe and therefore needs more discoveries,” Norwegian Energy Minister Terje Aasland stated in August 2025. Similarly, the UK’s Energy and Security Minister Michael Shanks announced plans to open drilling at two North Sea blocks that had previously been licensed for exploration. In the Americas, ExxonMobil sealed a deepwater exploration deal with Trinidad and Tobago, potentially involving investments of US$21.7 billion.
Africa is also seeing renewed interest. TotalEnergies SE is ramping up its offshore drilling plans in South Africa’s Deep Western Orange Basin, targeting up to seven wells located 211 kilometres off Saldanha Bay. Meanwhile, Namibia’s recent oil discoveries have made the region one of the most attractive exploration hotspots globally.
For Uganda, however, exploration activity has slowed following the exit of Armour Energy and DGR Global, which held licenses for the Kanywataba and Turaco blocks in the Albertine region. Those prospects may now improve, supported by a notable shift in tone from the International Energy Agency (IEA), which has historically been a strong supporter of moving away from fossil fuels. The Agency now appears more receptive to ongoing investment in oil and gas to meet growing global energy demands.
Uganda must act swiftly to seize this opportunity by expediting its third licensing round and organising road shows to promote its prospects. As financing for new projects becomes more accessible, taking prompt action could lead to new discoveries and broaden the country’s resource base.
The window of opportunity is open, but it will not remain so indefinitely. Global financing trends, shifting geopolitical priorities, and Africa’s rising profile as an exploration frontier make this the right time for Uganda to position itself as a serious, competitive player in the next wave of oil and gas investments.
Ms. Sandra Kyoshabire is a Stakeholder Management officer with the Petroleum Authority of Uganda