What does first oil and gas mean for the region and how does Senegal plan to maintain the growth momentum seen with first hydrocarbons?
First production from GTA and Sangomar is scheduled for Q4 2023, and we work hard with partners to achieve these goals. With this, Senegal will now move from being a non-producing country to a producing and exporting country. The revenues from this industry will open up significant opportunities to accelerate the country’s economic growth. The government has ambitious plans for local content and a gas-to-power strategy to produce cheaper and cleaner energy, which will increase the contribution of the O&G industry to the Senegalese economy. Moreover, this growth momentum will be maintained by developing our hydrocarbon exploration for more important discoveries and by investing in different sectors such as agriculture to avoid making oil and gas the only support of our economy.
However, there are also challenges around putting in place an appropriate governance framework to prevent mismanagement. In Senegal, Article 25-1 of the constitution states that natural resources belong to the people, so in order to protect the Senegalese economy, effective management of these resources is essential, as is the establishment of an appropriate legal framework.
What has the government and NOC done to improve Senegal’s competitiveness for foreign investment? How will first oil and gas enhance the country’s attractiveness for foreign capital and participation?
There are multiple drivers for foreign investment, but some of the most important ones are institutional stability, peace, infrastructure and assets, and finally, access to complementary resources and capabilities. As we know, Senegal is one of the most stable and peaceful countries in the region, which makes investments secure and less risky. The government has been working on the development of key infrastructure – ranging from roads to ports which make the internal and external transport of goods and individuals easier for any company – as well as the creation of a qualified workforce in every segment of the oil and gas industry through the creation of the National Oil and Gas Institute, which will ease the contractor’s search for employees and increase the amount of experienced and skilled engineers and technicians. Finally, the discovery and the production of oil and gas attracts in itself foreign investment through the creation of new markets.
In January, U.S. Secretary of the Treasury, Janet Yellen, visited Senegal, emphasizing the country’s intention of strengthening economic ties between the two countries. What opportunities are there across Senegal’s energy sector for U.S. companies and why does Petrosen serve as the ideal partner for U.S. players?
The U.S. is a major player in the energy sector with extensive reserves and leading companies with multiple decades of experience. In a country like Senegal, with new discoveries, an underexplored onshore basin and a booming energy sector, U.S. companies can get access and facilities to new ventures and participate in the development of the country with PETROSEN as the ideal partner.
In terms of cooperation with American companies, I think that the PSCs of Saint Deep Offshore and Yakaar-Teranga, in which Kosmos Energy has played an important role, demonstrate the effectiveness of a win-win partnership model. In this context where the natural gas market is becoming global, PETROSEN is open to such collaboration across the entire value chain of the oil and gas industry.
While Senegal has emerged as a key upstream player, what is being done to advance the downstream industry across the country? What role will public-private sector partnerships play in expanding this segment of the value chain?
PETROSEN HOLDING have two affiliate companies – PETROSEN E&P for the upstream and PETROSEN T&S for the downstream. For Senegal, the downstream sector comprises the transportation, refining and commercialization of oil and gas. The refinery, La Société Africaine de Raffinage, 93% owned by PETROSEN, is a well-developed facility for commercialization. PETROSEN is not only working to solidify its presence in those segments, but is also working to position itself in other markets such as storage and petrochemicals, by integrating the value chain with the future creation of a plant to produce urea from gas in order to supply the region with fertilizers, thus developing the agriculture sector and more.
What does PETROSEN’s 2023 agenda look like and can we expect any new deals to be announced including final investment decisions, licensing round updates or regional cooperation agreements?
We are working with our partners to finalize the development concept of GTA Phase 2. The objective is to select a concept that is technically robust and economically viable by Q1-2023 and then to start the Pre-FEED and FEED studies. This will be a strong signal to the industry. In parallel, we are progressing with the Yakaar-Teranga Phase 1 which is dedicated to the local market (gas-to-power, gas-to-mining, petrochemicals, for example). The aim is to reach FID by the end of 2023 or the beginning of 2024 at the latest.
Regarding exploration, some interesting and important prospects have been identified and some wells are planned to be drilled by this year in order to increase our reserves. More than 20 free blocks with high potential for discoveries are available and we are expecting to sign more contracts during this year.
During last year’s MSGBC Oil, Gas & Power conference, PETROSEN signed a local content MoU with Technip Energies. What strategies is PETROSEN putting in place to scale up local content across the energy sector and how will this MoU serve to advance the development of the domestic industry?
PETROSEN is working closely with the Senegalese National Local Content Monitoring Committee in order to strengthen the Local Content Law and make sure Senegalese companies and workers are considered first, whenever applicable, for every contract signed within the projects. Regarding the MoU with Technip, it includes technical and knowledge transfer activities related to water, oil and gas engineering; different types of platforms and onshore facilities; and offshore gas field development concepts. They also cover the principles of skills transfer related to the energy transition.
