Senegal Designs Well-Rounded Oil and Gas Strategy

Image: Africa Emerge

As the promotion body of Senegal’s hydrocarbon sector, state-owned oil and gas company, Société Nationale des Pétroles du Sénégal (PETROSEN), has seen a dramatic increase of interest from international players in the country’s petroleum resources. PETROSEN Managing Director, Mamadou Faye, spoke to Africa Energy Series – Senegal about how PETROSEN is the instrument of application of the oil policy of the State of Senegal.

To what extent are the different governmental institutions – Cos-Petrogaz, PETROSEN, INPG – complementary in achieving President Macky Sall’s vision for the oil and gas sector?

Several key institutions are involved in the oil and gas sector in Senegal including the National Strategic Orientation Committee for Oil and Gas (Cos-Petrogaz), the Ministry of Petroleum and Energy, the Ministry of Finance and Budget, the state-owned petroleum company PETROSEN and the National Institute of Oil and Gas.

The Cos-Petrogaz, which operates directly under the Presidency of the Republic of Senegal, is a strategic management and supervisory body. Its mission is to assist the President of the Republic and the government in the definition of the hydrocarbon sector’s overall strategy and to monitor its implementation, through the Permanent Secretariat which serves as the coordination tool.

The Ministry of Petroleum and Energy is the official supervisory entity responsible for the preparation and implementation of the policy defined by the Head of State in the energy sector. He namely ensures the control and follow-up of the petroleum operations.

PETROSEN is in charge of the following operations: promotion of the sedimentary basin, exploration and production of hydrocarbon resources, refining, storage, marketing, transportation and distribution, as well as industrial activities related to the segments listed above.

Finally, The National Institute of Oil and Gas aims to develop national petroleum expertise and promote the employment of Senegalese and Senegalese in the oil and gas sectors.

Senegal has made major oil and gas discoveries in the last few years and exploration is ongoing. Although first productions will flow in 2022, the government has decided to anticipate several segments related to the energy and petroleum sector.

Prior to the discoveries, Senegal decided to join the Extractive Industries Transparency Initiative (EITI), a global initiative aiming to increase transparency in the mining and petroleum sector. PETROSEN has a representative in the National Committee of EITI.

Can you give us some details on the exploitation strategy of the first resources extracted by 2022?

Oil and gas production is scheduled to start in 2022. For oil, some of the production will be used for the domestic market, namely sold to and refined locally by Société Africaine de Raffinage, Senegal’s refinery. In the short term, it is planned to increase SAR’s capacity through a facility modernization program from 1.2 million tons per year to 1.5 million tons per year. However, the state is planning the construction of a new refinery, with greater capacity, capable of refining complex crudes.

For natural gas, a monetization master plan is being developed. Furthermore, the Ministry of Petroleum and Energy has set up a Gas-to-Power strategy for the production of cheap electricity using natural gas as a feedstock. In short, apart from the production of LNG for export, gas will be used primarily for electricity production, but also the options for processing into fertilizer and other derived products are envisaged.

What is Senegal’s strategy regarding the allocation of offshore blocks currently open for exploration? Do you plan to launch an official licensing round?

We have a dozen offshore blocks that are currently open. They include new ultra-deep offshore blocks. In line with the new petroleum code introduced earlier this year, we will launch an official licensing round for these blocks. The announcement will be made during the Africa Oil and Power conference, taking on October 9, 2019, in Cape Town, South Africa. The process will last six months, during which the interested companies will have access to a dedicated data room in order to acquire and interpret data and to submit applications for the blocks of their choice.

Senegal is a democratic stable country. It has a growing economy and strong institutions. In the oil and gas sector, the discoveries between 2014 and 2017 were key in proving the country has a hydrocarbon province offshore. These two factors combined allow foreign investors and operators to view Senegal as a safe and attractive country for business.