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A team of legal, tax, and energy sector experts will work meticulously to make sure all legal aspects are carefully examined before making a decision
Senegalese Prime Minister Ousmane Sonko is set to review the oil and gas contracts the country signed with multinational corporations. He has set up a task force mandated for that purpose amidst rumors of nationalization.
A team of legal, tax, and energy sector experts will work meticulously to make sure all legal aspects are carefully examined before taking a decision. He, however, denied the rumours of nationalization reiterating his government’s ambition to rebalance the energy contracts in the national interest. The move comes after Senegal became an oil producer. Australia’s Woodside Energy announced in June that its Sangomar oil and gas field had produced its first oil.
Importantly, gas production from the GTA project should also kick off this year. It remains to be seen what the commission’s recommendations will be and in the event of negotiations if the expected changes can be implemented.
The discovery of oil and gas off the coast of Senegal in 2014 raised hopes that the industry could generate billions of dollars in revenue for the developing country and transform its economy. But the new government, which came to power earlier this year, pledged to review oil and gas contracts with foreign companies, which it described as unfavorable to Senegal.
Earlier, Prime Minister Ousmane Sonko reaffirmed his administration’s commitment to reviewing the contracts and promised that the country’s share will be guaranteed. Australia’s Woodside Energy has an 82% stake in the project and the state-owned energy company Petrosen holds the remainder. While Senegal’s fossil fuel output is not expected to be as great as that of bigger producers such as Nigeria, Petrosen is expecting the sector to generate more than US$1 billion per year over the next three decades.
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The country also has a liquified natural gas project at the border with Mauritania and extraction is scheduled to begin at the end of this year. The Greater Tortue Ahmeyim LNG project — which involves British energy giant BP, U.S. company Kosmos Energy, Mauritanian oil and gas company SHM, and Petrosen — aims to produce around 2.5 million tons of LNG per year.
