SENEGAL’S OIL AND GAS DREAMS HIT A HURDLE BUT UNLIKELY TO DETER INVESTORS
Corruption allegations have forced the presidentâs brother to resign, but are unlikely to significantly impact the oil and gas sector.
Corruption allegations reignite grievances and fuel suspicion of patronage and nepotism
Since US-based oil and gas company Kosmos Energy discovered two major gas deposits â in the Grand Tortue/ Ahmeyim and Cayar Offshore Profond blocks â off Senegalâs coast between 2014 and 2016, optimism has been high about the countryâs prospects for the economy as a whole, and the oil and gas sector in particular. The discovery of a third major gas deposit in the Cayar Offshore Profond block was announced by Kosmos and its British joint-venture partner, BP, in May 2017; they announced a fourth discovery on 1 July 2019. Many within the industry are bullish about the countryâs strong prospects. This is in part thanks to a 30-year development plan, Plan Senegal Emergent, Senegalâs accession to the Extractive Industries Transparency Initiative Ì¶ the voluntary global standard for the good governance of oil, gas and mineral resources Ì¶ and the presidentâs long experience in the hydrocarbons sector. Concerns mounted after Panorama and Africa Eye, programmes of British public broadcaster the BBC, in June alleged bribes had been paid to the presidentâs brother. The publication fuelled calls for a public inquiry into the awarding of gas concessions (See box on the BBC investigation, p.3).
Matters were made worse on 10 June 2019 when a leaked 2012 report by the Inspecteur gÃ©nÃ©rale dâÃ©tat (IGE), a Senegalese governance watchdog, made the rounds on social- and local media. It had concluded that the awarding of the Saint Louis Offshore Profond and Cayar Offshore Profond fields did not follow due process and violated local regulations. It also called for the cancellation of the contract to Petro-Tim, a company at the time owned by the Timis Corporation (See box), and accused the then-minister of energy and son of the now ex-president Karim Wade, and the director of state-owned oil company PÃ©troles du SÃ©nÃ©gal (PETROSEN) at the time of illicitly benefiting from the deal. Petro-Tim, the company that had signed the deal with PETROSEN, was at the time directed by Aliou Sall, President Macky Sallâs brother.
Responding to the leaked report, also on 10 June, the prosecutor-general was ordered to investigate the awarding of contracts, while making reference to the 2012 report. However, according to government spokespersons, this report was never sent to President Sall at the time, which would clear him from any suspicion. Nonetheless, his reputation has been somewhat stained by his entourage, but his authority is unlikely to be scathed unless further allegations of wrongdoing emerge during his next term. BP, Frank TimiÈ, and Kosmos Energy have all denied wrongdoing.