E&P Activity in the MSGBC Region Set to Contribute to Post COVID-19 Economic Recovery

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Since the discovery of large-scale oil and gas discoveries in the offshore waters of Senegal  and Mauritania from 2014-2017; the countries that make up the MSGBC Basin – Mauritania, Senegal, The Gambia, Guinea-Bissau and Guinea Conakry – have been looking to capitalize upon the influx of foreign direct investment from oil and gas exploration and production, as well as earn revenues from well-established mining operations throughout the MSGBC region.

Because a number of the countries in the MSGBC region such as Senegal and The Gambia depend a great deal on their well-developed tourism industries for revenue, their economies were adversely affected by the onset of the COVID-19 pandemic. Senegal saw real GDP contract over the course of 2020-2021, due to the impact of measures designed to contain the spread of the virus. Analysts at The Economist Intelligence Unit estimate that real GDP slowed to 0.7% in 2020, owing to the effects of the coronavirus pandemic. However, it is recovering in 2021 as both infrastructure investment and agricultural output rise. In 2022-25 growth will be boosted even further as hydrocarbon production comes on stream. www.eiu.com

There is E&P activity underway throughout the MSGBC Basin, with 2D and 3D seismic surveys being conducted in countries like The Gambia and Guinea-Bissau, but it is undoubtedly Senegal that is best positioned to see the most immediate post-pandemic rebound from new oil & gas activity.

Two of the largest single projects currently underway are Australian Woodside Energy’s SANGOMAR oil field and BP/Kosmos Energy’s Greater Tortue Ahmeyim LNG project. Straddling the border between Senegal and Mauritania, this field can supply up to ten million metric tons of liquefied natural gas per year. Commercialization is planned for 2023-2024.

Apanews.netapanews.net/en/news/senegal-relies-on-oil-gas-industry-to-boost-gdp/ 3/9the black continent.

Although Senegal currently relies on some limited onshore natural gas produced by companies such as Africa Fortesa, as well as heavy fuel oil used for power generation purposes, it is the upcoming monetization of the large-scale offshore natural gas reserves that will have the most immediate economic impact on the country, since they will not only make Senegal energy independent, but also set the stage for a new wave of industrialization as it will benefit from abundant and much more affordable electricity. The country currently has some of the most expensive electricity costs in West Africa, but the Ministry of Petroleum and Energy, led by H.E. Minister Aissatou Sophie Gladima, and the national utility company SENELEC are working closely on shaping the country’s energy future that will be powered by the monetization of the soon-to-be-abundant natural gas.

In this context, the African Energy Chamber has advocated for  Senegal to monetize its gas reserves to create jobs and give opportunities to the young generation. According to this structure, gas and oil projects “should attract large amounts of Foreign Direct Investment to Senegal over the next decade.” All this will promote “industrialization” and the construction of infrastructure needed for the future. With President Macky Sall’s gas-to-power strategy, Senegal can serve consumers with “more accessible, cleaner and cheaper energy,” according to the African Energy Chamber.

Apanews.netapanews.net/en/news/senegal-relies-on-oil-gas-industry-to-boost-gdp/ 3/9the black continent.

Mauritania was also adversely affected by the pandemic but it is poised for a recovery thanks to an emerging and increasingly dynamic oil and gas sector and a recovery in global demand for minerals. The Economist Intelligence Unit notes that Mauritania´s economic policy will focus on combating the fallout from the coronavirus pandemic. They are forecasting that the economy will average real GDP growth of 3.5% in 2021-2022 following a 1.5% contraction in 2020.  www.eiu.com

Mauritania is the other country, along with Senegal, involved in the massive GTAt. The GTA gas field is forecast to be a significant source of domestic energy and revenue. The approximately 33,000 square kilometers of acreage covered by the wider BP and Kosmos partnership, is thought to contain between 50-100 Tcf of gas resource potential and is estimated to contain more than 15 Tcf of discovered gas resources.

https://www.bp.com/en/global/corporate/what-we-do/bp-worldwide/bp-in-mauritania.html

But in addition to the boost that the GTA project will provide the Mauritanian economy over the course of 2022-2024, the country also benefits from other industries that are already contributing strongly to national GDP. The major exports from Mauritania are currently frozen fish, iron ore, silver, and gold. Thanks to the broader global economic recovery underway as economies around the world lift anti COVID-19 restrictions, demand for all of these products is increasing and they are forecast to remain strong over the course of 2021-2024.

The Gambia is overcoming a difficult 18 months caused by the adverse effects of the global pandemic. For the first time in nine years real GDP contracted by 1.5% over the course of 2020. But just like a number of its neighbors in the MSGBC region, the worst part of the health crisis is behind it and The Gambia’s economic prospects for 2022-2024 are much brighter. Analysts at The Economist Intelligence Unit are forecasting that there will be a gradual economic recovery over the course of 2022-2023 as the vaccination picks up pace and helps the country overcome the challenges that travel restrictions inflicted upon The Gambia´s tourism sector. Companies active in seismic imaging such as TGS,  are currently conducting the 4,770-square kilometer Gambito 2020 3D  seismic survey which covers open acreage in deep and ultra-deep waters and looks to be highly prospective. It is difficult to quantify exactly at this point in time what the direct impact of the country’s emerging oil & gas sector will be in terms of supporting the post-COVID economic recovery underway, but both the Ministry of Energy & Petroleum of The Gambia and the NOC GNPC are working closely together to prepare the country to maximize the role of the energy sector in supporting long-term economic development and job creation.

The economic recovery in the Republic of Guinea-Bissau is also underway. Analysts at the Economist Intelligence Unit are predicting real GDP growth of 2.5%  during the remainder of 2021 and even more robust growth of 3.4% during 2022, in line with improving sentiment and rising exports of major cash crops like cashews as economic conditions in the country improve further. www.eiu.com

Perhaps even more important than any of the macroeconomic indicators in each of these various MSGBC countries, and the pace of their respective economic recovery underway, is the undeniable fact that these countries are all working together and thinking about the medium to long-term. They have clearly understood that maximizing their hydrocarbon resources and ensuring economic benefits from adopting gas-to-power projects is contingent upon continued intra-regional cooperation, as well as expanding trade and investment throughout the region. In the past, a major offshore gas discovery located on the border between two countries as is the case with Grande Tortue, might have led to a territorial/maritime dispute and stalled progress on the project. Instead, both Senegal and Mauritania moved very quickly to put in place the necessary mechanisms to cooperate effectively and monetize these vast gas reserves. Other examples of regional cooperation are evident in other countries of the MSGBC region as well. A case in point is The Agence De Gestion Et De Cooperation Entre Le Senegal Et La Guinee Bissau, (The Agency for Cooperation Between Senegal and Guinea Bissau, (AGC). www.agc-snbg.org   was set up as a special agency that reports directly to the presidency of both countries, as well as The Ministry of Petroleum and Energies in Senegal, and the Ministry of Natural Resources and Energy in Guinea Bissau.  Thanks to this entity, today Senegal and Guinea-Bissau are cooperating very effectively to capture joint investment in their specific maritime zone.

The crucial stakeholders from the various MSGBC Basin countries will be meeting soon in Dakar, Senegal in December at Oil, Gas, & Power MSGBC 2021 to showcase the many opportunities in their respective oil & gas sectors, and to help attract a new wave of investment that will further accelerate hydrocarbon and energy sector development throughout the region. www.msgbc2021.com

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Miguel Artacho

Miguel Artacho

Miguel is a Field Editor at ECP. Miguel is a forward-thinking communications professional currently specializing in the energy sector. Adept at developing engagement strategies and building relationships. He is known for working ethically and effectively with internal and external stakeholders to further the business goals.

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