Introduction

Senegal's oil and gas sector has rapidly evolved, positioning the country as a significant player in the global energy market. The offshore gas industry, particularly, is witnessing substantial developments that promise to enhance the nation’s economic landscape and energy security. This document highlights current trends, key projects, business models, and investment opportunities within Senegal's offshore gas sector.

Key Developments

Greater Tortue Ahmeyim (GTA)

The GTA project, straddling the maritime border between Senegal and Mauritania, is one of the most significant offshore gas developments. With recoverable resources estimated at 15 to 20 trillion cubic feet (tcf), it is nearing completion:

• Phase 1 Completion: As of June 2023, Phase 1 was 90% complete, with first gas production anticipated by Q4 2023.

• Production Capacity: Initial production is set at 2.5 million tons per annum (mtpa) of liquefied natural gas (LNG), primarily for export.

• Future Expansion: Phase 2 aims to double production capacity, expected to commence between 2027-2028.

Joint venture partners include BP (56%), Kosmos Energy (27%), Petrosen (10%), and Société Mauritanienne Des Hydrocarbures (7%).

Sangomar Oil Project

The Sangomar project, also nearing completion at 85%, is poised to significantly impact Senegal's oil output:

• Recoverable Resources: It boasts approximately 650 million barrels of oil and 2.4 trillion cubic feet of gas.

• Production Start: Expected to begin in Q4 2023 with daily output projected between 75,000 and 125,000 barrels.

• Partnership: Operated by Woodside (82%) with Petrosen holding an 18% stake.

Yakaar-Teranga Development

This second large-scale gas project aims to develop additional resources estimated at 15 to 20 tcf:

• Development Plans: Conceptual studies are ongoing for an onshore plant with a final investment decision (FID) targeted for Q1 2024.

• Stakeholders: BP (60%), Kosmos Energy (30%), and Petrosen (10%, potentially increasing to 20% post-FID).

Investment Opportunities

Senegal offers various avenues for investment in its burgeoning oil and gas sector:

• Exploration Blocks: There are currently 16 offshore and six onshore exploration blocks available.

• Refinancing Opportunities: Investors can engage in refinancing National Oil Company (NOC) interests in established projects like GTA Phase 1 and Sangomar Phase 1.

• Project Financing: Opportunities exist for financing ongoing projects, particularly GTA Phase 2 and Yakaar-Teranga.

Key Players

The offshore gas sector's landscape features several pivotal players:

• BP: A leading partner in both GTA and Yakaar-Teranga projects, instrumental in shaping Senegal’s energy future.

• Kosmos Energy: Actively involved in major projects like GTA and Yakaar-Teranga, contributing significantly to deepwater exploration.

• Petrosen: The national oil company plays a critical role in the Sangomar project and holds stakes in other key developments.

• Woodside: As the operator of the Sangomar project, Woodside is vital to the country's oil production efforts.

Economic Impact

Revenue Generation

The oil and gas sector is projected to generate substantial revenue for Senegal:

• The Sangomar project alone could yield between $2 billion to $4 billion over its lifespan.

• The GTA project is expected to generate net revenues of approximately $14 billion over three decades from LNG exports.

Investment Attraction

The initiation of oil production at Sangomar marks a transformative era for Senegal’s energy sector. This influx of investments is expected to stimulate economic growth and create jobs across various sectors.

Growth Projections

The International Monetary Fund (IMF) anticipates a remarkable annual growth rate of 10.1% for Senegal in 2025, largely driven by the oil and gas industry.

Energy Security

Domestic Supply Enhancement

Projects like Yakaar-Teranga aim to produce significant volumes for domestic use, reducing reliance on imported fuels and supporting local industries.

Infrastructure Development

Investment in infrastructure such as gas pipelines and power plants is crucial for maximizing the benefits of increased gas production. Key projects include:

• A network of pipelines estimated at $300 million.

• Gas-to-power facilities expected to be operational by 2026.

Export Potential

Senegal's strategic positioning as a reliable LNG supplier enhances its diplomatic relations and trade agreements globally.