Senegal’s promising oil and gas industry
Senegal’s first oil and gas projects are under-development with production expected to start within two years. Centurion Law Group was recently invited to Dakar to look at the country’s investment opportunities and begin a narrative on supporting the country’s local content development. The delegation met with H.E. Macky Sall the President of the Republic of Senegal; H.E. Mouhamadou Makhtar Cissé, Minister of Petroleum and Energies, Ousmane Ndiaye, Permanent Secretary of COS-Petrogaz; Aguibou Ba, Director General of the National Institute for Petroleum and Gaz (INPG) and a number of local oil and gas operators and service companies.
Mickael Vogel, Director of Strategy at Centurion Law Group was part of the delegation and gives the following insights:
What is your feeling on current market dynamics?
Senegal is moving and leading West Africa’s energy transition. Under the leadership of President Macky Sall and in support of the Plan Senegal Emergent, investments are on the rise and the energy sector is growing. Just this week, the country inaugurated the phase 1 of West Africa’s largest wind farm. In two years, it will start producing gas. In three years, it will start producing oil. These are transformational dynamics for the Senegalese economy that will sustain even higher growth levels for years to come. A big feeling in the market is that of getting things right. The Senegalese authorities understand and know what is at stake with the oil & gas projects the country is developing. Local content, jobs creation and capacity building are priorities for the government to ensure an energy transition that is transparent and beneficial to the local economy.
Where do investment opportunities in the oil and gas industry lie? And what do you think can be done now to promote investment into Senegal – from a business perspective?
In a country like Senegal, opportunities exist across the value-chain. Once gas is made available for domestic use, it can feed existing and future power plants. But it can also be monetized across various industries such as petrochemicals and fertilizers. Another big opportunity lies in joint-ventures with local services companies. Senegal is serious about local content, and that offers strong opportunities for qualified foreign players to partner with Senegalese companies and entrepreneurs and transfer the right capacities and technologies to be part of the country’s future.
As one of Africa’s upcoming oil and gas producers, Senegal has the opportunity to set an example in the governance of its industry. What would be the perfect local content environment for Senegal – what does the country need?
Senegal has already put the foundations in place for local content development with its new Petroleum Code. Now it is up to the public and private sector to come together to train the local workforce and build domestic capacities so Senegalese entrepreneurs and companies can participate in the oil & gas sector and meet local content requirements. This is why the National Institute for Petroleum and Gaz (INPG) is so important. Its Director General, Aguibou Ba, describes it as a social project between the public and private sectors and young Senegalese. What the INPG does now will serve a long way in ensuring the sustainability of Senegal’s oil & gas sector. It is very encouraging to see the support given by international operators to such initiatives and their commitment to train the local workforce. We encourage more stakeholders to come together and support Senegal and growing the INPG and supporting similar initiatives aimed at giving Senegalese companies and entrepreneurs the tools and skills they need to be successful in this industry.
What are the most recent deals affecting the future of Senegal’s energy industry?
The Greater Tortue Ahmeyim project, lead by BP and Kosmos, and the Sangomar Offshore Oil Project, led by Woodside Energy and its partners, are the key projects to watch for the sector. The first one will see the development of a 2.5 million tpy FLNG facility in its phase 1, and put Senegal on the map of global LNG exporters as early as 2022. The second one is the country’s very first offshore oil project and can generate tremendous value for the local economy. It will have a production capacity of 100,000 bopd and should start production by 2023.
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