Dakar seems determined to avoid problems which have plagued other resource-rich nations
Just days after this month’s announcement that new, high-quality gas reserves were discovered by energy giants BP, Kosmos as well as SMPHM and Petrosen in the Greater Tortue Ahmeyim project which straddles the border between Senegal and Mauritania, Senegalese President Macky Sall gave a sweeping speech outlining his administration’s policy on the exploitation of these promising reserves.
“My will, not only through words but through actions I have already taken and others I have yet to take, is to protect our country from the upheaval resulting from oil and gas exploitation which has occurred in some developed or developing countries,” he declared. “This country will not be a no man's land; investors’ rights will be respected just as national rights will be preserved... I want a Senegal for all."
To back up his rhetoric, Sall and his administration have overhauled the legal framework overseeing the country’s petroleum resources. On 1 February 2019, the President signed into law two key pieces of legislation for Senegal’s oil and gas sector—a new petroleum code and a stand-alone law governing local content in the petroleum sector. With the aid of this new legal framework, Dakar hopes to retain control over its own natural wealth and avoid the infamous “oil curse” which has plagued so many countries with abundant natural resources.
Sall’s extensive discourse last Tuesday is sure to help clear the air following a BBC report last month alleging that the president’s brother had improperly benefited from oil and gas exploration contracts with BP and Romanian-Australian business tycoon Frank Timis.
The allegations were eagerly weaponised by the Senegalese opposition—despite the fact that the exploitation rights were awarded by Sall’s predecessor, Abdoulaye Wade, and Sall would have faced litigation if he had made moves to curb the deal. The scandal has somewhat died down as Sall’s administration has acted to address the accusations. The Senegalese justice ministry is carrying out a full investigation, and Aliou Sall resigned his government post.
Macky Sall, who was recently named the 2019 “Africa Oil Man of the Year” for his efforts to court investment into Senegal’s nascent oil and gas sector, has suggested that the accusations may stem from an attempt to take advantage of the country’s petroleum resources. “We know that where there is oil, some will try to destabilise the country’, the Senegalese president remarked. The African Energy Chamber concurred, dubbing the allegations “an obsession to taint a reform-driven President and the oil industry at any cost […] meant to slow investment into [the] oil industry’s projects and investment into Senegal”.
It’s encouraging, then, that Sall’s speech last Tuesday shifted the focus away from political squabbling, instead inviting the opposition to engage with the strategic committee on how to best manage Senegal’s natural resources. After all, Senegal is formulating plans for a new future based on two prospective hydrocarbon ventures: the SNE oilfield and the Greater Tortue/Ahmeyim gas project. Both are set to start producing export revenues in the early 2020s, and promise an annual government revenue flow in excess of US$1 billion.
In the face of such promise from the sector, it is imperative that Senegal install a transparent system for managing its oil and gas revenue. The creation of Cos Pétrogaz, an institution answering directly to the president and tasked with developing the national strategy for the sector, has been a significant step. The establishment of implementation arm GES Pétrogaz in 2017 is another, with the body’s recruitment of experts in petroleum legislation, oil engineering, logistics, procurement and other technical specialties already well underway.
The Sall administration also plans to send delegations to other oil producing countries, including Norway, France, the UK and Algeria, to consult on best practices in the management of dividends from the exploitation of Senegal’s oil and gas reserves. The delegations bear a weighty responsibility: under the government’s Emerging Senegal Plan (PSE), oil and gas wealth is destined to tackle internal issues like high unemployment, large-scale emigration and the risk of extremist violence.
The strategy, so far, seems to be working. Diplomats and oil industry executives alike have already predicted that Senegal stands a better chance than most at turning this windfall into long-term success. Efforts to strengthen its institutions including its legal framework, they say, will go a long way to avoiding the worst of the corruption, inflation and inequality that has befallen oil producers elsewhere.
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