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Senegal launches first bidding round
SENEGAL
SENEGAL’S Oil Minister Mahamadou Makhtar Cisse launched the country’s first oil and gas bid- ding round on November 5.
Speaking at an energy conference in Cape Town, Cisse said that Senegal was inviting poten- tial investors to submit offers for three offshore blocks. “We are launching today for the first time inthehistoryofpetroleumexplorationinSene- gal a licensing round of three blocks of sediment basin,” he declared.
Senegal is carrying out the auctions in two phases, he stated. The first phase of the process will cover legal matters and will include road- show presentations of the legal framework for the projects in Dakar, Houston and London, he said. This phase will end in late January of next year, he said.
The second phase, he added, will give oil and gas operators the opportunity to assess the potential of the offshore blocks. This phase is due to begin next February and will end on July 31, 2020, he said.
Controversy
Dakar had originally planned to launch the licensing round on October 9. It recently opted to push the date back, though, explaining that it had not been able to finalise certain contract documents in time for the original deadline.
Some observers have speculated that the delay may be related to an ongoing investiga- tion into the activities of Aliou Sall, the brother of President Macky Sall. Senegalese prosecutors began an inquiry earlier this year into allegations of fraud related to an offshore natural gas project that BP joined in 2017.
Cisse has downplayed speculation on this front. Last month, he told Reuters that the probe had not had any discernible effect on Dakar’s decisions about the licensing round.
But the brief postponement of bidding is not the only problem facing Senegal as it seeks to bring its oil and gas reserves on stream. Petro- Nor E&P has noted that Senegal’s latest licens- ing round includes a block that is currently the subject of a legal dispute. In a statement dated November 5, the Oslo-listed company identi- fied the block in question as Senegal Offshore Sud Profond (SOSP). Senegalese authorities launched the bidding round that includes SOSP and two other blocks during the Africa Oil Week conference in Cape Town, it reported.
Arbitration
PetroNor said in the statement that it had not relinquished its claim to the disputed block.
“African Petroleum Senegal, a subsidiary of PetroNor, remains in arbitration proceedings with the government of Senegal and continues to reserve its rights to a 90% working interest in SOSP,”itsaid.
“As such, this update has no impact on the arbitration process, and the board of PetroNor remains steadfast in its legal position and looks forward to having the matter resolved through either the independent channels of arbitration or via a satisfactory settlement agreement in the interest of all parties.”
SOSP’s status has been under debate since late 2017. At that time, African Petroleum, a company that PetroNor acquired in August of this year, was seeking to enter into the second renewal phase of its production-sharing con- tracts (PSCs) for two blocks – SOSP and Rufis- que Offshore Profond (ROP). It was also trying to convince PetroSen, the national oil company (NOC) of Senegal, to allow it to commit to col- lecting 3D seismic data rather than drilling new wells.
These attempts to strike a deal were unsuc- cessful, so African Petroleum never signed documents on the second renewal phase of the project. It then made a formal complaint regarding the two blocks, saying that Senegalese authorities had not taken the steps necessary to validate the termination of the PSCs, and requested arbitration.
Since then, the arbitration process has not moved forward quickly. This is largely because the parties ha-----ve not secured a mutually acceptable arbitrator.
As of press time, neither the Senegalese gov- ernment nor PetroSen had responded publicly to PetroNor’s statement.
Senegal has recently reported several major gas discoveries in the offshore zone, near the border with Mauritania. BP (UK) and Kosmos Energy (US) have found sizeable reserves at Grand Tortue-Ahmeyim and Yaakar-Teranga and hope to use these fields to support two LNG projects.
Meanwhile, Woodside Energy (Australia), Cairn Energy (UK) and FAR Ltd (Australia) are planning to extract both crude oil and natural gas from the SNE licence area.™
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w w w . N E W S B A S E . c o m Week 44 06•November•2019