The newly elected Senegalese President Bassirou Diomaye Faye, has pledged to re-negotiate oil and gas contracts of projects, developed by bp Plc, Kosmos Energy Ltd. and Woodside Energy Group Ltd. in order to boost revenue for the state.
Faye made this promise days before this week’s presidential election. With his victory, he is going to make good on that promise his economic team noted.
Ngagne Demba Toure, an oil adviser to Faye, said:“To boost the state’s revenue from oil and gas, it’s necessary to renegotiate the contracts to increase the state’s shares and change the system of sharing of production. “Renegotiating contracts doesn’t mean that the state will impose itself on the companies without taking the law into consideration, but that the two parties agree to discuss some clauses of the contract.”
A “business-friendly” environment, is what Kosmos expect to get from the West African countryto carry on, the company said while responding to questions. “We remain focused on working with our partners to deliver first gas” at the GTA project later this year, it noted.
London based firm bp, aims to keep a constructive relationship with the incoming president, just as it did with the country’s previous leaders, Gordon Birrell, executive vice president responsible for production and operations noted.
No response was gotten from Woodside yet. While Faye’s prdecessor Macky Sall described renegotiating the contracts as “disastrous” for Senegal.
“Oil and gas contracts can always be improved, but frankly, thinking that we can change the contracts already signed with the companies is not possible,” he said.
Papa Daouda Diene, an analyst at the Natural Resource Governance Institute, a non-governmental organization, said “It is also important for the government to set realistic timelines on that process and communicate transparently to make sure that everything goes well and we do not add further delays.”
The IMF revised its forecast for economic growth in Senegal this year to 8.3% from 10.6% after earlier delays to the projects designed to realize exports of as much as 100,000 bopd and at least 2.5 MMtpa of LNG.
Faye’s economic team questioned the validity of an earlier deal that transferred offshore fields to bp. Urging the need to change contracts awarded to oil and gas exploiters for the benefit of the country’s citizenry.
The West African country is set to open the taps this year on the $4.8 billion Grand Tortue Ahmeyim liquefied natural gas (LNG) project and Sangomar oil development after numerous delays, setting it up to become one of the world’s fastest-growing economies.
