Senegal’s modernised regulatory framework to attract investment
Image: Centurion Law Group
Centurion Law Group is a pan-African corporate law conglomerate, with a specialized focus on cross-border business and energy law.
What key regulatory aspects must be implemented by a soon-to-be producing country like Senegal to improve oil and gas sector attractiveness?
Across oil jurisdictions, regulators and decision-makers must take into account the state of advancement of their industry to implement the right policies and regulatory frameworks. Obviously, a soon-to-be-producing country like Senegal who has never produced more than 20,000 barrels of oil per day cannot have the same regulations as a country like Nigeria who has been producing over 1.5 million barrels for decades. Regulations have to be progressive, so what matters in a case like Senegal is to implement regulations that set the ground for the development of a sustainable, local content-oriented and jobs-creating industry. When planning for the industry development and its regulations, the building of domestic capacity, both within national institutions and within the private sector, is of paramount importance.
What is your sentiment vis-à-vis the readiness of Senegal’s regulatory framework in light of first productions to flow in 2022?
I have an extremely positive and optimistic sentiment on Senegal’s ability to build a robust and sustainable oil & gas industry. Let’s salute first the engagement of the government towards transparency with the Senegalese people. Very early on after the discoveries, the government started engaging the Senegalese civil society as a whole around debates such as local content development, domestic capacity building and local jobs. This sent a strong message to the region and the investment community as a whole that Senegal was committed to building a modern African oil & gas sector based on good governance.
How does the new oil and gas code fit the government’s ambitious local content goal?
The new code fits under two aspects. The first one pertains to inclusion. The entire Senegalese society actively participated in debates and discussions before and during the drafting of the code, which makes the final text one that responds to the aspirations of both the industry and the people. Secondly, the new framework specifically addresses local content, which benefits from its own law. New terms make it compulsory to secure participation of the Senegalese private sector in in hydrocarbons activities, especially in construction, supply and oilfield services operations. The text also provides for technology and skills transfers that will go a long way in supporting the development of Senegalese companies.
Which African countries can serve as models for Senegal to put a successful regulatory framework into action?
There are many lessons to be drawn from several African jurisdictions when it comes to implementing the right regulatory framework for Senegal. Taking international, non-African models can also prove very beneficial. Trinidad & Tobago for instance is very relevant as it is a relatively small country which has early on focused on regulating and developing its gas industry, and is now a global gas exporter. Within Africa, there are definitely good lessons to be drawn from local content development in Nigeria, environmental sustainability in Gabon, or the good use of oil revenues to spur economic diversification in Equatorial Guinea.
How can regional cooperation boost oil and gas exploration across the MSGBC Basin? What steps must be taken by countries to trigger efficient synergies?
Senegal and Mauritania have already shown Africa that putting its differences aside and working towards co-developing projects is beneficial for African economies and their people. Tortue is a landmark project in that regard, and one that will profoundly impact the socio-economic development in both countries. The major step to encourage future such collaboration and projects is to simply keep the dialogue open and engage more.
This is what the African Energy Chamber is successfully doing for instance. We need to see African nations engage each other more, as the intra-African energy dialogue has remained too low given the natural resources potential of our continent.