IN a move that has drawn both scrutiny and concern, Senegal’s newly elected President Bassirou Diomaye Faye has announced plans to renegotiate mining and oil contracts, prompting reactions from business analysts and political figures.
Speaking through his Energy and Mines Minister Birame Souleye Diopon on April 11, President Faye signalled that the government would revisit oil, gas, and mining agreements following an upcoming audit.
President Faye, Africa’s youngest democratically elected leader, campaigned on promises to prioritise the renegotiation of oil and gas contracts, citing existing agreements as ‘very unfavourable’ to Senegal.
Australia-based Woodside Energy, which operates in Senegal’s Sangomar oil field alongside Petrosen, cautioned against altering existing contracts. Christine Forster, a spokesperson for Woodside Energy, emphasised the importance of ‘contract sanctity’ and called for maintaining investment certainty through collaborative partnerships.
‘Our experience has shown that the most successful jurisdictions have been those that work in partnership with industry, respect contract sanctity, and create investment certainty,’ Forster told AFP.
Former President Macky Sall echoed similar sentiments, expressing scepticism about altering established contracts.
‘Frankly, thinking that we can change the contracts already signed with the companies is not possible. That would be a disastrous turn for Senegal,’ Sall remarked in an interview with Bloomberg News.
According to the previous administration and documents disclosed by the Extractive Industries Transparency Initiative (EITI), Senegal was projected to receive up to 60 percent of future oil and gas revenues.
Ibrahima Bachir Drame, former communications manager of Petrosen, noted that while explicit renegotiation clauses are absent in oil contracts, provisions for managing potential disputes exist.
Drame cautioned that renegotiating contracts could carry significant risks, potentially impacting Senegal’s reputation among global investors.
‘A renegotiation of contracts would be a risky business, and the reputation of Senegal in the world of investment could deter potential investors,’ Drame warned.
President Faye’s stance on contract renegotiation underscores broader debates about investment policies and contract stability in Senegal’s extractive industries, signalling potential shifts in the country’s economic strategy under new leadership.
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