By Charné Hundermark, Southern and East Africa Editor
Over 450 billion cubic feet of natural gas and 1 billion barrels of oil reserves have positioned Senegal as an exceptionally attractive hydrocarbon destination. Recent sizeable discoveries made in 2014-2016 have only furthered the appeal of the country, and with the introduction of international oil companies (IOCs), the sector has seen accelerated project development and industry expansion. Spearheaded by H.E. President Macky Sall, the Senegalese government has introduced a domestic approach to energy sector development, placing local content as a key driver of industry success.
Local Content at the Forefront of Industry Expansion
With an ambitious target to have local companies account for 50% of oil and gas activities in Senegal by 2030, the government is focused on not only ensuring local companies benefit from increased participation in the sector but also position themselves as key drivers of the country’s energy sector transformation.
More recently, project developments taking off across the country have created newfound opportunities for local Senegalese oil and gas and service companies. The country’s two largest developments, the Greater Tortue Ahmeyim project and the Sangomar Field Development project, in particular, have presented a unique opportunity for IOCs to help develop both the energy and domestic sectors in Senegal. Companies such as Woodside Energy, BP, Kosmos Energy, and Technip have a role to play, and the government is focused on ensuring this role is fulfilled.
The Senegalese government has introduced a domestic approach to energy sector development, placing local content as a key driver of industry success
Local Content-Focused Institutions Take the Lead
In pursuit of enhanced local content, Senegal’s government has turned to the establishment of institutions to help regulate sector activities and ensure local content requirements are being met by all industry players. The most notable of these is COS-Petrogaz, an agency tasked with the supervision, evaluation and control of implementation of state policy. With the aim of ensuring that the country’s overall energy vision is implemented, the organization focuses on transparency, good governance, and the promotion of local content.
Meanwhile, with a focus on enhancing local capacity, the government established the National Petroleum Institute (INPG), aimed at human capital development within the oil and gas industry. The primary objective of INPG is to train and upskill the local workforce to reduce reliance on foreign workers for industry development. Through the training of petroleum engineers, geologists, and oil and gas technical professionals, INPG is committed to enhancing the domestic workforce, improving the lives of thousands of Senegalese people by creating opportunities for industry participation.
Goal-Oriented Policies Shape Senegal’s Sector
In line with local content ambitions, Senegal’s government has made considerable efforts to ensure industry compliance and implementation. By inserting local content requirements and mandates into the legal framework, the policy is being used as a driving force of local capacity building, skills transfer, and workforce participation.
The government has established a National Committee for the Local Content Monitoring (CNSCL), tasked with coordinating the development of local content in the industry. What makes the committee unique is that it comprises five representatives of the national private sector and oil and gas companies, one representative from civil society, and two representatives from trade unions. Accordingly, the CNSCL represents the people, leading to increased transparency and productivity regarding local content implementation and regulation.
In January 2019, Senegal implemented a new Petroleum Code which places a primary focus on the preservation of national interests and local content. The code introduces specific local content provisions, including requirements for the participation of the national private sector; requiring goods and services related to the petroleum industry to be provided by local companies; ensuring obligations are in place for technology transfer; the prioritization of employing Senegalese workers; as well as renewed ownership specifications which stipulate that hydrocarbon resources belong to the people, rather than the state.
Through targeted national objectives, institutional oversight, and industry-focused legislature, Senegal is rapidly becoming a leader in local content. The country is focused on ensuring energy sector developments do not progress without the active participation of the local workforce and has placed capacity building, skills transfer, and domestic company participation at the forefront of the growth of the sector. At the region’s premier energy event, MSGBC Oil, gas & Power 2021 (https://bit.ly/2YBC5Po), taking place in Dakar on the 2-3 of December, Senegal’s local content progress and achievements will be emphasized, with stakeholders given the opportunity to directly engage with regulators and authorities. Find out more about the conference here: The Energy Minute: MSGBC Oil, Gas & Power 2021 (https://bit.ly/3At6pco).