Senegal sets up commission to review oil and gas contracts
Senegal has established a commission dedicated to reviewing oil and gas contracts in the country.
This initiative was announced by the government following directives from President Bassirou Diomaye Faye, who took office in April 2024.
The formation of this commission is part of a broader strategy to ensure that national interests are prioritized and safeguarded in the management of Senegal’s natural resources.
The decision to create this commission stems from President Faye’s commitment to conduct a comprehensive audit of the mining, oil, and gas sectors.
Upon taking office, he expressed concerns over certain contracts deemed “unfavorable” for Senegal. The primary objective of the newly formed committee is to analyze existing contracts critically, ensuring they align with the country’s economic goals and environmental standards.
On July 10, 2024, the Senegalese government officially announced the establishment of this review committee. According to statements made during a Council of Ministers meeting, Prime Minister Birame Souleye Diop emphasized that the committee would focus on ensuring that contracts reflect national interests and include mechanisms for safeguarding these interests. This aligns with President Faye’s earlier directive for an audit intended to revisit agreements with foreign entities operating within Senegal’s borders.
While many see this as a necessary step towards better governance of natural resources, there are concerns regarding potential repercussions on foreign investment. Local political actors have voiced apprehensions that renegotiating existing contracts could lead to tensions with investors, potentially diminishing Senegal’s attractiveness as an investment destination. Former President Macky Sall also cautioned against such moves, suggesting that altering signed contracts could have disastrous effects on the economy.
In addition to financial aspects, the review process will also address environmental obligations tied to these contracts. Minister Diop highlighted that companies failing to meet their environmental responsibilities would be scrutinized more closely. He proposed that foreign firms should contribute a portion of their profits toward local community projects focused on job creation and sustainable development.
The establishment of this commission marks a pivotal moment in Senegal’s approach to managing its natural resources. By prioritizing national interests and addressing environmental concerns, the government aims not only to enhance economic benefits but also ensure sustainable practices within its extractive industries.
