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Senegal Tuesday, June 11, 2024 turned a significant page in its economic history, by launching oil production for the first time—a move President Bassirou Diomaye Faye vowed will be meticulously managed to benefit the nation. This historic development is expected to catalyze great economic transformation in the West African state.
Australian energy conglomerate Woodside marked the initiation of oil extraction as a “historic day” and a “key milestone” for both the company and Senegal. The Sangomar deep-water project, also rich in gas reserves, is set to yield 100,000 barrels of oil daily, potentially injecting billions of dollars into Senegal’s economy.
Thierno Ly, the general manager of the national oil company Petrosen, heralded the start of production on Tuesday, declaring it a “new era” for Senegal. “We have never been so well-positioned for opportunities for growth, innovation, and success in the economic and social development of our nation,” Ly said. Petrosen owns an 18% stake in the Sangomar project, with Woodside holding the remaining share.
President Faye, who ascended to office in April, has stressed his commitment to renegotiating the nation’s oil and gas contracts, a cornerstone of his election campaign. Addressing students on Tuesday, he stressed that the revenues from oil production would be “well managed”.
The Senegalese government’s move to revisit and renegotiate oil and gas contracts has stirred some concerns among investors, wary of potential instability. However, government proponents argue that increasing Senegal’s share in these ventures is essential for the nation to fully reap the benefits of its natural resources. Prime Minister Ousmane Sonko, a pivotal figure in Faye’s campaign and a former opposition leader, has been vocal about the need to reassess contracts deemed “unfavourable” by previous administrations. “We’re the ones who promised you we’d renegotiate the contracts, and we’re going to do it. We’ve started already,” Sonko said in a speech to young people on Tuesday.
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