Senegal is enacting a range of reforms, focusing on oil and gas ahead of expected windfall.
Senegal’s second EITI Report covering 2014 was launched in October amidst robust public debate calling for more openness about recent natural gas discoveries offshore. The process of implementing the EITI Standard in Senegal has informed recent reforms including publication of oil and gas contracts, establishing an oil and gas strategic policy committee and clarification of license allocation procedures.
“[The EITI Standard] provides a real tool for participatory diagnosis and for decision-making to lead reforms required to support an efficient management of the oil, gas and mining sectors in a smooth social and economic context for the benefit of the population.”
HE President Macky Sall noted in his foreword to the 2014 EITI Report.
An ocean of potential
Whilst not huge in terms of revenue, recent natural gas discoveries off of the coast of Senegal have attracted public attention. Only around 7% of the FCFA 117 billion (USD 237 million) came from the oil and gas sector according to Senegal’s 2014 EITI Report, while extractive industries as a whole accounted for 6% of government revenues and 1.4% of GDP. Yet discoveries of over 25 tcf of natural gas offshore underpinning plans for a world-class LNG terminal will significantly change Senegal’s economy.
Fixing a framework
The latest EITI Report highlighted some lack of clarity in license allocation procedures. While Article 8 of the Petroleum Code provided for license allocations on a 60-day no-objection basis from the Ministry of Energy, it does not specify the technical and financial criteria assessed in license allocations. “The Petroleum Code is not very clear in some aspects, so it is time to bring needed clarity to areas like license transfers since Senegal has abundant resources,” Professor Ismaïla Fall, Chairman of the EITI multi-stakeholder group, noted on 24 October. The government is certainly taking note. On 12 October 2016, President Sall signed Decree 2016-1542 establishing the Strategic Orientation Committee for Oil and Gas (COS-PETROGAZ) under his office to ensure broad public oversight of the nascent sector’s development.
Senegal had already pledged to publish all extractives contracts as part of its preparations for EITI candidature in 2013. On 20 September 2016, the government took an important step in fulfilling this promise when Prime Minister Mahammad Boun Abdallah Dionne announced the publication of ten oil and gas production-sharing contracts (PSCs), also available on the EITI Senegal website, and 27 mining contracts on the government’s website. “If we want a healthy debate about oil and gas issues, stakeholders need to have information so we need to build capacities,” Professor Fall noted at the launch of the 2014 EITI Report.
All 25 mining, oil and gas companies and nine government entities reported their payments and revenues in the 2014 EITI Report, with only one company not certifying its disclosures. New information such as license data, barter agreements and social expenditures are disclosed for the first time. A new “Comprendre pour Agir” (Understand in order to Act) summary, as in 2013, will mix infographics and other visuals to ensure broad understanding of what the report says.
Access the Senegal 2014 report