Senegal has stepped onto the global energy stage with its inaugural oil production, marking a historic milestone for the West African nation. The commencement of two pivotal projects, the Sangomar field and the Greater Tortue Ahmeyim (GTA) liquefied natural gas (LNG) venture, signals Senegal’s debut in the oil and gas sector. However, as the nation celebrates this achievement, concerns about equitable benefit distribution and contract revisions loom large.

The Sangomar Project: A Closer Look

The Sangomar field, situated approximately 100 kilometers offshore Dakar, is set to produce 100,000 barrels per day (b/d) of crude oil. The Leopold Sedar Senghor FPSO, named in honor of Senegal’s first president, plays a pivotal role in loading and storing the crude. Despite local production, Australian company Woodside Energy plans to export Sangomar’s crude rather than selling it domestically. The crude’s medium sour qualities align with international grades like Oman and Norway’s Johan Sverdrup.

However, the share distribution in the Sangomar project raises eyebrows. Woodside holds an 82% stake, leaving state-owned Petrosen with a mere 18%. Given that this project operates on Senegalese land, calls for contract revision are growing louder to ensure a fairer distribution of benefits.

Political Implications

Bassirou Diomaye Faye’s recent election victory in March included a promise to revise oil and gas contracts. Yet, no concrete action has been taken thus far. The government’s inertia is concerning, considering the immense potential of the oil and gas sector to bolster Senegal’s economy.

The GTA Project: A Game-Changer for Senegal and Mauritania

The GTA project represents a pivotal moment for both Senegal and Mauritania. Situated 120 kilometers offshore, in water depths of 2,850 meters—the deepest subsea infrastructure in Africa—the GTA field holds immense promise. Here are the key points:

1. Project Overview
   • The GTA project is a cross-border gas venture straddling the maritime boundary between Mauritania and Senegal.
   • It aims to establish the basin as a world-class gas province and a major LNG hub
   • Phase 1, the initial step, is set to produce approximately 2.3 million tonnes of liquefied natural gas (LNG) annually.
2. Share Distribution
   • The allocation of shares in the GTA project reflects the collaboration between the two nations.
   • Senegal holds a 5% stake, while BP, the British multinational energy company, commands the lion’s share with 60%.
   • Kosmos Energy, an American exploration and production company, holds 28.6%, and Mauritania has a 5% stake
3. Recommendations and Considerations
   • Equitable Benefits: Given the strategic importance of the GTA project, both countries should ensure that benefits—economic, social, and environmental—are distributed fairly. Contract revisions may be necessary to address any imbalances.
   • Local Capacity Building: Senegal and Mauritania should prioritize developing local expertise and capacity to actively participate in project operations.
   • Environmental Stewardship: As the project unfolds, environmental impact assessments and sustainable practices must be rigorously enforced.
   • Infrastructure Investment: Investment in supporting infrastructure—such as ports, pipelines, and storage facilities—will be crucial for efficient LNG production and export.
   • Transparency and Accountability: Regular reporting and transparency mechanisms should be established to track revenues and ensure accountability.

In conclusion, the GTA project holds immense promise, but its success hinges on collaborative efforts, fair resource sharing, and responsible management. Senegal and Mauritania must seize this opportunity to shape their energy future and benefit their citizens for generations to come.

Charting the Path Forward: Recommendations

1. Contract Revisions and Equitable Distribution:
   • Senegal must prioritize revising existing contracts to ensure a fairer distribution of benefits. The current share imbalances, especially in projects like Sangomar and GTA, warrant immediate attention.
   • Engaging with foreign companies involved in these projects provides an opportune moment to negotiate terms that benefit both the nation and its citizens.
2. Local Capacity Building:
   • Senegal should invest in developing local expertise and workforce capacity. Training programs, educational initiatives, and skill-building efforts will empower Senegalese citizens to actively participate in the industry.
   • By nurturing local talent, Senegal can maximize the positive impact of its oil and gas resources on its own people.
3. Environmental Responsibility:
   • Environmental impact assessments and sustainable practices should be integral to project operations. Senegal must safeguard its natural environment while reaping the benefits of resource extraction.
   • Collaboration with international partners can ensure best practices are followed, minimizing ecological harm.
4. Infrastructure Investment:
   • Supporting infrastructure—such as ports, pipelines, and storage facilities—is essential for efficient production and export.
   • Senegal should strategically invest in infrastructure development to optimize resource utilization and minimize logistical challenges.
5. Transparency and Accountability:
   • Regular reporting mechanisms should be established to track revenues and ensure transparency.
   • Senegal’s citizens deserve clear information about how oil and gas revenues contribute to their well-being.

In Conclusion

Senegal’s oil and gas industry stands at a critical juncture. While celebrating progress, addressing share imbalances remains paramount. Let us hope that Senegal’s leadership maximizes its resources wisely, ensuring prosperity not only for the present but for generations to come.