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Senegal is now an oil-producing country

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Senegal is now an oil-producing country

Australian company Woodside Energy has successfully launched oil production at the Sangomar field off the coast of Senegal, marking the country’s debut as an oil producer. This achievement signifies the safe realization of Senegal’s first offshore oil venture.

Senegal loins the exclusive club of hydrocarbon-producing countries

The development of the Sangomar field features the FPSO Léopold Sédar Senghor, named after Senegal’s first President, anchored about 100 kilometers offshore. With a storage capacity of 1,300,000 barrels, the FPSO symbolizes the project’s grandeur and ambition. By 2025, Senegal could rank among the Top 10 oil-producing countries in Africa.

Facilitated by the joint venture Rufisque Offshore, Sangomar Offshore, and Sangomar Deep Offshore (RSSD), comprising Woodside (operator with an 82 % stake) and Société des Pétroles du Sénégal (PETROSEN) (holding an 18 % stake), the project maintains its estimates between 4.9 and 5.2 billion USD, despite inherent complexities.

Senegal’s black gold : New economic era

Phase 1 of the Sangomar field development introduces a standalone floating production, storage, and offloading (FPSO) facility capable of producing 100,000 barrels daily. Additionally, it integrates a subsea system designed for future project phases.

« This is a historic day for Senegal and Woodside, » said Meg O’Neill, CEO of Woodside. The Sangomar project is expected to generate value for shareholders under the terms of the production-sharing contract.

Thierno Ly, Managing Director of PETROSEN E&P, highlighted the importance of this achievement: « The first oil production from the Sangomar field marks a new era for our industry, economy, and people. This accomplishment results from our teams’ unwavering commitment to overcoming challenges to achieve our strategic goals in a complex environment. »

Oil quality meeting international standards

As drilling at Sangomar continues, Woodside plans ongoing commissioning efforts and increased production throughout 2024. The crude oil quality, with approximately 31 degrees API, meets specifications sought in European and Asian markets.

The start of oil production at the Sangomar field represents a monumental achievement for Senegal’s energy landscape. It showcases Woodside’s competence in managing complex offshore projects. As production accelerates, the company is set to become a cornerstone of Senegal’s economic progress and a significant player in global energy markets.

Oil contracts : Bassirou diomaye faye seeks renegotiation

Petersen holds an 18 % stake in the project, while Woodside holds the remainder. Bassirou Diomaye Faye, elected president in April, aims to renegotiate the agreement as part of the reforms promised during his campaign. Addressing students, he stated that the revenues would be « well managed » and that an « intergenerational fund » had been created to benefit « your generation and those to come. »

Senegal’s decision to renegotiate oil and gas contracts is seen by some analysts as making investors nervous. However, government supporters believe the West African state must increase its participation in the projects so the nation can benefit from its natural resources. Already one of the most dynamic economies in Africa, this new status as an oil producer is expected to further stimulate Senegal’s economy.

Prime Minister Ousmane Sonko, a key figure in the president’s campaign, recently emphasized that the contracts signed by previous administrations were « unfavorable » to the country and would be reviewed.

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