Senegal has now officially joined the world’s oil producing nations as production has started at their first offshore oil project. The project, taking place in Senegal’s Sangomar oil field, is a joint venture between Woodside Energy, an Australian company, and Petrosen, Senegal’s state owned energy company.
New Ventures
The beginning of oil and gas production represents significant opportunity for Senegal. This particular project, of which Woodside Energy has an 82% stake in, aims to eventually produce approximately 100,000 barrels of oil per day.
It is located 100km south of Dakar, the Senegalese capital. The well began construction in 2020, and just began production on Tuesday, June 11th. Petrosen hopes the project will generate Senegal more than one billion USD in revenue over the next 30 years.
The project in the Sangomar field is just one of many that is set to begin production in Senegal this year. The Greater Tortue Ahmeyim (GTA), a very large liquified natural gas field that is off the shore of both Senegal and Mauritania. Both nations are working on developing the field, and are set to benefit extensively from oil and gas production there. Senegal’s projects in the GTA are set to begin production this year.
Both projects are hoped to provide unique and lucrative employment opportunities for the Senegalese populace, where the population suffers from high rates of unemployment, particularly amongst youth populations.
The GTA project involved the British oil company BP, the American oil company Kosmos, Mauritania’s oil company SHM, as well as Petrosen. The GTA field in particular is estimated to hold 15 trillion cubic feet of recoverable gas.
Contracts and Opportunities
With the employment crisis within Senegal, projects to begin the exploitation of Senegal’s natural resources was a key issue in the nation’s recent election in March that elected the current leader of Senegal, President Bassirou Diomaye Faye.
Many were worried that the previous administration, under President Macky Sall, had not negotiated contracts with foreign companies, in particular those involved with Senegal’s offshore oil projects, that would fully capitalize upon the opportunities being presented.
As such, a promise to renegotiate a number of these contracts and ensure that the Senegalese people reap their full benefits was one of many key promises of President Faye prior to his election.
“The exploitation of our natural resources, which according to the constitution belong to the people, will receive particular attention from my government. I will proceed with the disclosure of the effective ownership of extractive companies (and) with an audit of the mining, oil, and gas sector” -Senegalese President Bassirou Diomaye Faye, upon his first address to the people after his April 2nd inauguration
On Sunday, June 9th, Prime Minister Ousmane Sonko reaffirmed that commitment, stating that the government “will face multinationals.”
Senegal has a wide array of natural resources available to it, however it has largely failed to capitalize upon these resources, in part due to corruption within the nation.
The election of President Faye, a political outsider, has raised hopes that corruption will decrease, and the Senegalese economy will improve.
Prior to beginning production, the Sangomar project employed thousands of Senegalese citizens. With the project having now began production, this is likely to increase further.
