Senegal has become one of West Africa’s oil producing countries as the country started producing oil for the first time on Tuesday.
As President Bassirou Diomaye Faye promised that profits from the sale of the country’s oil and gas would be “well managed”, Australian energy giant Woodside described the oil production in Senegal as a “historic day” and a “key milestone” for the company and the country.
BBC reports that the Sangomar deep-water project, which also has gas, aims to produce 100,000 barrels of oil per day.
It is expected to generate billions of dollars for Senegal and boost the country’s economy.
The general manager of the national oil company Petrosen, Thierno Ly, said that the country had entered a “new era” when production began on Tuesday.
Ly was quoted as saying, “We have never been so well positioned for opportunities for growth, innovation and success in the economic and social development of our nation.”
It was reported that Petrosen has an 18% stake in the project while Woodside owns the remainder.
Elected in April this year, President Faye has been keen on renegotiating the deal as part of reforms he promised during the election campaign.
The President, while speaking to students on Tuesday, said that the earnings from the oil and gas production would be “well managed”, and that an “inter-generation fund” had been set up for the benefit of “your generation and those to come.”
The country’s move to renegotiate oil and gas contracts has been seen by some analysts as making investors jittery, but government supporters have reportedly said that it is vital for the West African state to increase its stake in projects so that the nation benefits from its natural resources.
A former opposition politician, Prime Minister Ousmane Sonko, who was a key figure in the president’s election campaign, recently insisted that contracts signed by previous administrations were ”unfavourable” to the country, and would be reviewed.
Sonko was quoted as saying on Tuesday, “We’re the ones who promised you we’d renegotiate the contracts, and we’re going to do it. We’ve started already.”
First published: BBC