Politically, Senegal has been setting an example for Africa as one of the continent’s most advanced democracies. Economically, however, the country has been coping with serious hardships as roughly half of Senegal’s population continues to live in poverty. With the discovery of large natural gas and oil fields along the coast of Senegal in 2014, the country may be headed for a wealthier future. Despite the positive outlook, the country must work to develop regulatory frameworks for good energy governance and the necessary infrastructure to secure long-term profits from the newly discovered natural resources.
While Senegal has been long disregarded by natural gas and oil exploring companies, it has gained attention from a number of businesses in recent years, including Cairn, an Edinburgh-based gas and oil company, Kosmos Energy, which uncovered the largest offshore gas reserves in West Africa, and the British gas and oil giant BP. Cairn reported that it had found natural oil reserves in two offshore blocks containing 950 million barrels of oil and 150 to 670 million barrels of oil respectively. These two blocks, which were discovered in 2014, broke a 20-year oil and gas drilling drought in Senegal. Cairn, Kosmos Energy, and BP are also investing in offshore drilling projects near the border of neighboring Mauritania. A joint harvesting project between Senegal and Mauritania led by BP and Kosmos Energy reportedly promises to yield as much as 50 trillion cubic feet of gas. According to BP reports, this enormous volume of gas could sustain regional gas demands for 30 to 50 years.
In spite of such promising projections, Senegal must be smart in its resource management strategy in order to avoid the ‘oil curse’ that has befallen other African countries such as Nigeria or Angola, where a surge of profits from gas and oil reserves overturned the countries’ economic and political stability. Preventing corruption among politicians and businessmen is a steppingstone towards allowing the public and the country’s economy to benefit from natural gas and oil wells. While the relatively strong democracy, bureaucracy, and institutions of Senegal increase the chances of having good resource governance, a corruption scandal involving the brother of Senegal’s president gives reason for doubt.
In June 2019, public British broadcaster BBC uncovered that Aliou Sall, President Macky Sall’s brother, was allegedly involved in a bribery scandal. The BBC reported that Aliou Sall was secretly paid $250,000 in 2014 by Romanian-Australian businessman Frank Timis, whose company Timis Corporation was granted two licenses for newly discovered Senegalese offshore gas blocks. Furthermore, the British broadcaster stated that BP appears to have paid Timis Corporation a sum of $250 million to gain a stake in the licenses, along with royalty payments of $10 billion that are to be transferred over the next decades. The involved parties have denied these allegations. The scandal was widely covered by Senegalese media and led to civilian protests in Senegal’s capital, Dakar. This eventually resulted in the resignation of Aliou Sall from his government post. Senegal’s president emphasized that the government will examine the case, but he did not order an official investigation.
Despite this reputational setback, President Sall could still steer Senegal’s gas and oil future in the right direction. President Sall may be able to utilize his expertise as a geological engineer educated at the Institute of Earth Sciences of Dakar and the French Petroleum Institute of Paris. Before Sall became Senegal’s President, he gained additional expertise when he served as Chief Executive Officer of the Senegalese National Oil Company (Petrosen) and as a special adviser to the former president in matters regarding energy and mines. Sall’s government appears to make cautious, long-term plans by rationing natural oil and gas revenues that will be used for public funds and sovereign investment. It is also presumed that the government seeks to slowly develop the local petroleum services sector and to lower electricity prices. President Sall has also accelerated efforts to avoid resource mismanagement by establishing a legislative, regulatory framework. A challenge that still lies ahead is beginning production. Production will be fully launched in the 2020s. By this time, Senegal’s leadership must demonstrate that it is capable of implementing a sustainable energy agenda.
