African state to review oil and gas contracts

Senegal’s new government has established a commission to begin reviewing various gas and oil contracts signed with the previous administration, the West African nation’s prime minister has announced.

Ousmane Sonko declared the move on national TV on Monday, months after President Bassirou Diomaye Faye, who won in a landslide victory in the March elections, announced plans to renegotiate a decade-old fishing agreement with the European Union. Faye has said the decision is part of efforts to restore marine resources and limit industrial fishing vessels in order to improve the country’s food security.

According to Sonko, the committee is made up of legal, tax, and energy sector experts who will work to realign contracts in the country’s best interests.

Following his inauguration in early April, President Faye promised radical economic reforms, saying his government would prioritize the exploitation of the country’s natural resources. In one of his first policy actions, the 44-year-old former tax inspector ordered an audit of the oil, gas, and mining sectors to reveal ownership. He has vowed to renegotiate the terms of contracts with foreign operators in the country if necessary.

The former French colony’s authorities have yet to provide details about the audit or any renegotiation plans.

However, on Monday, Prime Minister Sonko said the government remains committed to its pledge “to come back to these various agreements to re-examine them and work to rebalance them, obviously in the national interest.”

According to him, the commission that has been set up will have sufficient resources to look into the contracts and hire experts from abroad if necessary.

The African state only joined the list of oil-producing countries in June, when Australian company Woodside Energy announced the start of extraction in Dakar’s first offshore project. The Sangomar oil and gas project is expected to produce about 100,000 barrels per day.

British Petroleum (BP) is also planning to start gas production at the Greater Tortue Ahmeyim (GTA) liquefied natural gas (LNG) project on the maritime border between Mauritania and Senegal by the end of the year. BP has described the project as one of its biggest ever, stating that it would generate up to 2.3 million metric tons of LNG per year to help meet global demand and boost the economies of the two coastal African nations.

Last month, Russian Deputy Foreign Minister Mikhail Bogdanov and President Faye also discussed joint projects in energy, mining, and processing of minerals during a meeting in the Senegalese capital, Dakar.