Senegal’s new president, Bassirou Diomaye Faye, has launched a comprehensive audit of all oil and gas contracts, aiming to secure more favorable terms for the West African nation, Bloomberg reports.
The move comes as Senegal grapples with a larger-than-expected budget deficit and seeks to bolster its finances.
The audit, which is expected to be completed within the next year, will scrutinize contracts awarded to companies including BP, Woodside Energy Group Ltd., and Kosmos Energy Ltd. by the previous government.
Deputy Minister of Oil and Gas, Mamadou Niane, who explained that the review could potentially increase the state oil company’s share in contracts from 10% to 20%, or even higher.
However, the move has sparked concerns from industry experts. The Natural Resource Governance Institute, a non-profit organization, cautioned that renegotiating contracts during a critical phase of production commencement could have negative consequences.
“An opaque process could damage relations with partners, discourage future investments, and undermine citizens’ trust in the governance of their natural resources,” the institute stated in a recent report.
Despite these concerns, Senegal is moving forward with the audit. The government is particularly focused on the Yakaar-Teranga project, which is fully owned by Senegal and for which a final investment decision is expected next year.
Meanwhile, Kosmos Energy is seeking a new partner following BP’s withdrawal last year. The government is also actively engaging with other countries, including those in the Middle East, to secure additional partnerships in the oil and gas sector.
