Senegal OpenOil: The offshore sector will not make any significant contribution to public finances

According to pessimistic projections from OpenOil, a Berlin-based financial analysis firm. In a note published on its site, OpenOil says that the hydrocarbons discovered in Senegal will not transform the country's economy. The short-term collapse of prices in 2020 and the long-term expectations of structural decline due to the energy transition cast doubt on any development beyond the initial stages announced and the contribution to public finances will be minimal in a realistic scenario. In fact, the study authors came to some major conclusions. The first is that oil revenues will not alleviate Senegalese public debt. According to them, oil and gas will not bring more than a billion dollar less than a year of the current debt service which is more than 600 billion. The offshore sector will not make any significant contribution to Senegal's public finances. Revenues will barely reach 2% of the annual budget and not before the 2030s.

The second conclusion is that Petrosen will need one billion (around 540 billion F Cfa) dollars to significantly increase its stake in oil in Sangomar and gas in Gta. A figure in line with what is announced by the Senegalese authorities. During his time in committee, the Minister of Oil and Energy, Aïssatou Sophie Gladima, revealed to deputies that Senegal had increased its share from 10 to 18% on oil and from 10 to 20% on gas. If we know that the gas project requires 2,676 billion F Cfa investment, then we understand that the country has released 267 billion F to acquire 10% more.

For oil in Sangomar, the investment need amounts to FCfa 2,342 billion. The 8% therefore represents more than 200 billion. Which makes a total of around 500 billion that Petrosen must mobilize. And yet, OpenOil predicts failure on these investments and there are realistic scenarios in which they never earn enough to repay the loans. This makes the authors say that there is even at this level, a risk of over-indebtedness to which Dakar is exposed. Hence the conviction of OpenOil that these loans could never be granted in Senegal.