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Wednesday, July 17, 2024

Senegal begins production of oil and gas

Senegal begins production of oil and gas

Senegal, a West African country, made history on Tuesday, June 11, 2024, as Australian energy giant Woodside Energy announced the commencement of oil production at the Sangomar deep-water project.

This marks a significant milestone for Senegal, which is now officially an oil-producing nation. The project aims to produce between 100,000 and 125,000 barrels per day and contains both oil and gas.

The floating production storage and offloading (FPSO) facility has a storage capacity of 1.3 million barrels and is located about 100 kilometers off the coast of Dakar. The start of production was described as a “key milestone” by Woodside Energy CEO Meg O’Neill and a “historic day” for both Woodside and Senegal.

READ ALSO: Invest in African Energy 2024 to discuss future of Africa’s gas, LNG industries

Thierno Ly, the managing director of Petrosen, Senegal’s state-owned energy company, echoed this sentiment by stating that the country had entered a “new era” when production began.

The oil sector is expected to generate billions of dollars in revenue for Senegal and contribute significantly to its economic development.

Charles Thiemele, Africa director of trading company BNG, expressed his optimism about the potential impact on the country’s economy by stating that it would help reduce its energy bill and eventually enable it to produce more than 200,000 barrels per day.

This would bring Senegal closer to the production levels of countries like Gabon and DR Congo.

The Sangomar field was discovered in 2014, raising great hopes for the economy of one of the least developed countries in the world. However, its exploitation has faced numerous delays due to strategic changes within Woodside Energy and financial troubles with Australian company FAR whose shares were eventually bought by Woodside. Despite these challenges, Petrosen remains confident that this new era will bring opportunities for growth, innovation, and success in the economic and social development of their nation.

READ ALSO: Senegal achieves first oil from Sangomar project

President Bassirou Diomaye Faye has been pushing for renegotiation of oil and gas contracts as part of his election campaign promises to reform the sector. Prime Minister Ousmane Sonko also justified this move by stating that previous contracts were unfavorable to the country. Renegotiating these contracts is seen as vital for increasing Senegal’s stake in projects so that they can better benefit from their natural resources while ensuring fair deals for all parties involved.

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