New Senegal map fuels concerns
Written By Barry Morgan
The latest acreage map published by Senegal will worry a clutch of junior companies keen to keep hold of blocks as the government moves to attract more major players to the upstream scene in a proposed licensing round, writes Barry Morgan.
A map published by the semi-autonomous Senegal Extractive Industries Transparency Initiative (SEITI) indicates that T5 Oil & Gas, A-Z Petroleum, Elinilto Group and African Petroleum (APCL) no longer control certain blocks.
Nevertheless, APCL looks to have been re-instated as an operator in one case while it has emerged that French supermajor Total has an option to secure a huge swathe of ultra-deepwater acreage.
For two years, President Macky Sall and his Energy Ministry have sought to reduce the profile of smaller independent explorers in favour of inviting more mid-tier and major players to drive exploration and development beyond Cairn Energy’s SNE and Fan discoveries.
Several juniors claim to have partners lined up with finance ready to meet obligations but have been unable to secure government approval for their.
Senegal’s Petroleum Code of 1998 provides for just this but the government stands accused of impatience, unwilling to let lengthy procedures stipulated by the Termination of Contract provision (Article 30) take their course.
According to the map — which SEITI confirmed has been updated by Dakar’s Department of Hydrocarbons to reflect the current status — T5, founded by former board members of Tullow Oil, is no longer presented as operating the Louga licence, an onshore extension of the St Louis and Cayar acreage held by Cairn Energy.
Elinilto has been removed as operator of the Senegal Offshore South Shallows block, while Nigeria’s A-Z has been removed from the Diourbel licence, now listed alongside the neighbouring Thies-Mbour block as open acreage.
Elinilto told Upstream it was unaware of the cartographic omission.
T5 and A-Z — a subsidiary of Lagos-based Chicason Group — did not formally respond to requests for comment.
The map records Total as operator of the contested Rufisque Deep in the face of arbitration threats by ousted licence-holder APCL while formally listing Woodside Energy as having replaced ConocoPhillips on the Rufisque-Sangomar-Sangomar Deep block despite arbitral proceedings initiated by Australia’s Far Ltd.
It is understood five companies received revocation letters from the government in spring 2016.
In some cases, the authorities refused to countenance transferring seismic commitments from the first to the second exploration phase and, in November 2016, suggested operators re-apply for their own acreage, triggering heated correspondence between operators and the Energy Ministry and Prime Minister Mahammad Dioune, copied to Sall.
Most juniors balked at this pressure, arguing notification procedures had not been observed and citing provisions allowing for the reasonable expectation of licence extension under extenuating circumstances, especially where sourcing finance for seismic acquisition required assurance on title.
T5 opted to re-apply for a new seven-year term on Louga, making a formal submission in July 2017.
However, the process stalled after Sall won a fresh mandate in local elections, promising a licensing round to attract major players.
Upstream understands that T5 — along with others tempted to re-apply — were advised in September 2017 by newly-appointed Energy Minister Mansour Elimane Kane to be patient and that their “applications will be reviewed” once a new Petroleum Code is ratified.
Meanwhile, SEITI’s map appears to reinstate APCL as operator of the Senegal Offshore South Deep block despite it being threatened with revocation by the government having missed commitment deadlines.
The map also records that vast swathes of ultra-deep acreage, including below the Gambian maritime boundary off Casamance, are subject to the ultra-deep offshore hydrocarbon production research and sharing contract signed with Total.
This contract is more than simply a one-year study commitment and formally allows Total right of first refusal, setting out production sharing terms in the event of oil or gas discovery in acreage reaching to the limit of Senegal’s Exclusive Economic Zone or maritime boundary with Cape Verde.