Senegal Eyes Next Stage of Offshore Development After Achieving First Oil

WOODSIDE ENERGY OIL SENEGAL

Senegal started oil production at the country’s inaugural offshore oilfield development – the Sangomar project – in June 2024. The milestone marks the beginning of a transformative era for Senegal’s energy sector, and in addition to opening numerous opportunities for economic growth and social development, is expected to attract fresh slate of investment in the country’s offshore blocks.

Sangomar: A Catalyst for Economic Growth

The Sangomar project is led by the Rufisque Offshore, Sangomar Offshore and Sangomar Deep Offshore (RSSD) joint venture, which includes global energy company Woodside Energy as the operator with an 82% participating interest and Senegal’s national oil company Petrosen with an 18% interest. Covering 400 km² and in water depths of 700-1,400 meters, Phase 1 of the Sangomar Field Development has a capacity of 100,000 barrels per day of crude oil. The $5.2 billion project comprises 23 wells, with the RSSD joint venture set to drill the 24th production well in the current campaign.

Owing to the export-centric nature of the project, Sangomar is expected to generate substantial revenue for the country. Through foreign exchange generated from exports, as well as fees and corporate income tax, Phase 1 alone is projected to bring in between $2 billion to $4 billion in direct revenue over its duration. This brings newfound economic benefits for Senegal. According to the IMF, Senegal will experience an estimated growth rate of 10.1% in 2025 while seeing its inflation decrease by 2%. Growth projections for 2024 are estimated at 7.1% compared to the sub-Saharan African average of 3.8%, owing largely to projects such as Sangomar. Overall, the government anticipates the oil and gas industry to produce over $1 billion annually for the next three decades.

What’s Next for Senegal?

In addition to the Sangomar oil project, Senegal has a strong lineup of LNG developments on the horizon. These include the Greater Tortue Ahmeyim (GTA) project, developed by energy majors bp and Kosmos Energy, which anticipates first gas production by the end of 2024. The project is situated on the maritime border of Senegal and Mauritania and is expected to produce 2.5 million tons of LNG annually in the first phase, with output dedicated entirely for exports – primarily to Europe. The GTA project is expected to yield net revenues of $14 billion over 30 years.

Meanwhile, the Senegalese basin, still largely unexplored, holds significant potential for hydrocarbon exploration and production. Notable gas discoveries at Teranga-1, Yakaar-1 and Yakaar-2 are estimated at 32 trillion cubic feet, with Kosmos Energy currently developing Phase 1 of the Yakaar-Téranga project to produce 150 million cubic feet per day for domestic gas supply. Energy major TotalEnergies has also identified potential hydrocarbon traps through extensive 3D seismic data acquisition in its Rufisque Offshore block.

As projects come online, the revenues from the oil and gas sector offer a crucial opportunity to accelerate Senegal’s development by boosting public investment. In preparation, the new government, led by President Bassirou Diomaye Faye, has committed to reviewing oil and gas contracts with foreign companies while revising the framework for managing these revenues. Currently, Senegal’s extractives revenues are channeled through the general budget, but the country is developing new fiscal rules to save a portion of these funds for future generations through a stabilization fund. The sector’s growth will hinge on successful

The MSGBC Oil, Gas & Power 2024 conference and exhibition, held in Dakar on December 3-4, will spotlight new opportunities in Senegal’s extractives sector, bringing together local stakeholders and international investors. As the only energy event that represents the entire region, the conference serves as a premier platform to sign deals and advance projects.

Explore opportunities, foster partnerships and stay at the forefront of the MSGBC region’s oil, gas and power sector. Visit www.msgbcoilgasandpower.com to secure your participation at the MSGBC Oil, Gas & Power 2024 conference. To sponsor or participate as a delegate, please contact sales@energycapitalpower.com.

Share This Article

Other Reads

Onur Yilmaz

Onur Yilmaz

X
X