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Despite last weeks’ violence Senegal still on track to become a growth hotspot

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Senegal presents a range of opportunities for those investors cognisant of the political risks. Image credit: Victor Rutka from Unsplash

Despite last week’s violence Senegal still on track to become a growth hotspot

Although the violence that erupted in Senegal last week is of grave concern and raises a few red flags, the country presents a range of opportunities for those investors and project developers that remain cognisant of the political risk.  

Deadly violence erupted in Senegal last week following the sentencing of opposition politician Ousmane Sonko. According to reports by Reuters, rowdy crowds of protesters in face covers, some wielding spades, set tires and debris on fire, squaring up to police in various districts of the capital, Dakar. Mobs have attacked supermarkets, shops, banks, police stations and public transport networks.

On Friday interior ministry spokesperson Maham Ka said another person was killed in the southern town of Cap Skirring, where protesters targeted a gendarmerie, bringing the death toll up to 10.

However, Ka told the state broadcaster the situation was now mainly under control and that the few remaining “incursions” were being handled.

“If demonstrations had remained peaceful … there would be no issue,” he said, describing the protests as “gratuitous violence” and congratulating security forces for their interventions.

Meanwhile a presentation by Thierno Seydou Ly, Director General of Senegal’s national oil company Petrosen E&P at the Invest in African Energy Forum in Paris last week, outlined the range of investment opportunities available across Senegal’s burgeoning energy industry.

This year is expected to be a milestone year for Senegal as the country witnesses first oil and gas production from the Sangomar and Greater Tortue Ahmeyim (GTA) projects.

These projects are expected to usher in a new era of economic growth for the country while underscoring the immense investment potential across the wider Mauritania, Senegal, Gambia, Guinea-Bissau and Guinea-Conakry basin (MSGBC basin).

Providing insight into the new opportunities emerging for investors and project developers, Ly, Director General, Petrosen E&P, delivered his presentation ahead of the upcoming African Energy Week (AEW) conference and exhibition – scheduled for 16-20 October in Cape Town.

Senegal: an investment destination of choice (Despite last week’s violence Senegal still on track to become a growth hotspot)

Senegal’s economic growth is expected to remain strong throughout the period 2023-2027, boosted by the start of oil and gas projects and new investment flowing inwards.

In this scenario, Ly emphasised that Senegal’s legal and regulatory framework make the country an investment destination of choice, with implemented policies prioritising the protection of private investors and fair sharing of benefits while offering long-term relationships between government and global players.

“There are many opportunities in Senegal and we want to create partnerships, including technical and financial partnerships. The stability of the country in terms of democracy means that your investments will be protected. Our legal framework makes it possible to protect investments and create a win-win environment for investors,” Ly emphasised.

Unlocking the full potential (Despite last week’s violence Senegal still on track to become a growth hotspot)

Petrosen, as the national oil company, has put in place an ambitious upstream agenda that aims to unlock the full potential of the offshore market. According to Ly, the Senegalese basin is divided by 29 blocks, with 16 offshore and six onshore blocks currently available for offer.

Ly shared that as of April 2023, the country’s two major hydrocarbon projects are moving fast. The GTA project is 90% complete, with 2.5 million tons per annum (mtpa) of liquefied natural gas (LNG) expected to be produced from Q4 2023.

Ly added that the concept for Phase Two of GTA has been selected by the development partners, which would see production increase by 2.5 to 3 mtpa between 2027 and 2028.

Additionally, as of April 2023, the Sangomar project is 85% complete, with between 75,000 and 125,000 barrels per day to be produced from 2023.

A domestic refinery will treat part of the production, with the field’s associated gas developed in a specific phase (2025-2026). Senegal also expects FID for the Yakaar-Teranga project by Q1 2024, with 150 Million standard cubic feet per day (mmscfd) to be produced from 2026 for the local market. Future phases are planned and expected for the development of local industries – fertiliser, urea, methanol, mining and more – and LNG export.

Meanwhile, Ly stated that under the Oil and Gas Master Plan, Senegal is pursuing several other developments including an ammonia/urea plant – of which a conceptional study is underway; a refinery upgrade – phase 1 to increase capacity from 1.2 to 1.5 million tons (finalised) and phase 2 to 3.5 million tons (under preliminary studies); a liquefied petroleum gas storage facility (feasibility studies); a gas-to-power pipeline network (under FEED studies); a natural gas virtual pipeline (preliminary studies); a CNG and LNG fueling station (preliminary studies) and a fertiliser plant (preliminary studies).

As such, opportunities for local players and entrepreneurs are growing steadily, with the government’s focus on local content development set to play a key role in expanding the domestic market.

“We want to use the workforce of Senegal as much as possible for the development of the oil and gas sector in Senegal. It will be a win-win situation for both the workforce and companies as it will reduce costs.”

This year’s edition of AEW will further unpack the range of investment opportunities present across the Senegalese energy market. From upstream oil and gas to downstream infrastructure to renewable energy and power developments, Senegal is on track to become a regional energy hub.

Despite last week’s violence Senegal still on track to become a growth hotspot

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Despite last week’s violence Senegal still on track to become a growth hotspot

 

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