Revenue from Senegal’s Hydrocarbon Industry Set to Finance Development

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Following major offshore discoveries and large-scale projects currently under development, Senegal is emerging as a key player in Africa’s hydrocarbon industry and is on track to become a competitive oil and gas business hub in the region.  

In recent years, Senegal has undertaken vast petroleum exploration activities, revealing the existence of commercially retrievable oil and gas resources. Initiation of oil production and exploration of new gas deposits are expected by 2021-2023 through the Emerging Senegal Plan, pushed forward by His Excellency, President Macky Sall, who remains committed to unlocking Senegal’s hydrocarbon potential in order to boost the country’s economic growth. 

Senegal’s hydrocarbon potential derives, primarily, from its sedimentary basin, comprising part of the larger MSGBC (Mauritania, Senegal, Gambia, Bissau and Conakry) Basin. The country’s first major oil discovery involved the drilling of the Gadiaga 2 well in the Gadiaga gas field by Petrosen, Senegal’s national oil company, in 1996. The Rufisque and Sangomar Deep Offshore Blocks, with reserves estimated at one billion barrels, were drilled as part of a joint venture between Britain’s Cairn Energy and its Senegalesse subsidiary, Capricorn Senegal at the end of 2014 and, in 2016, American energy company, Kosmos Energy Ltd. announced the discovery of natural gas at the Guembeul 1 well as well as the discovery in the same year of 20 trillion cubic feet of natural gas at its Tarenga well in the Cayar Deep Offshore blocks, 65km northwest of Dakar.

A litany of successful discoveries off the cost of Senegal since 2014 has made the country an illustrious and attractive investment opportunity for oil exploration companies and, once fully assessed, Senegal has the potential to outperform other oil-producing African countries with regards to proven reserves.

The 2014 discovery of the Sangomar deepwater oil field, 90km off Senegal’s southern coastline, resulted in the largest conventional oil discovery in the world for that year.Oil production of the oil field is scheduled to begin in 2023. Estimated reserves at Sangomar are estimated to contain 2.5 billion barrels of oil, with the country hoping to pump between 100,000 and 120,000 barrels per day (bdp) by 2023.

Bordering the waters of Senegal and Mauritania, the $4.8 billion Grand Tortue Ahmeyin gas field development, operated as a joint venture between international companies BP Pls and Kosmos Energy Ltd., is expected to produce 2.5 million tons of LNG annually and 70 million cubic feet of natural gas per day by its first phase in 2023. Similarly, the Yakaar-Teranga hub, with a resource of 15-20 trillion cubic feet of natural gas, is expected to start production in 2023 or 2024 and is set to produce gas for internal consumption.

Activities in the country’s hydrocarbon sector has the potential to generate financial resources for Senegal, with public revenues generated by the sector increasing four-fold between 2013 and 2014. Revenues generated by its oil sector is projected to increase further with the entry into production of newly discovered oil fields by 2021-2023 and constitute a potential source of revenue to help finance the country’s development, which is particularly important as the country seeks to deploy the second phase of its Emerging Senegal Plan (2019-2023).

At its 2020 Africa Oil & Power webinar, Executive Chairman of the Africa Energy Chamber, NJ Ayuk stated, “In many ways, under the leadership of President Macky Sall, Senegal has been a prime example for emerging oil and gas producers in Africa … particularly in its hydrocarbons industry,” adding that, “Senegal can still maintain its momentum in driving and attracting new investment and increased exploration activities.”

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Matthew Goosen

Matthew Goosen

Matthew Goosen is a Video Editor and Content Writer at Energy Capital & Power. He holds an Honours Degree in Film and Media Studies at the University of Cape Town and is currently undergoing his Masters Degree. Born in Pretoria and raised internationally, he has been living in Cape Town since 2013.

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