23.11.2018 kl 17:43 2301

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Senegal: another dispute related to oil! (EXCLUSIVE)

Image: African Petroleum website
Ouestafnews - In early October 2018, the Senegalese government launched a call for tenders for the licensing of two oil blocks: Senegal offshore South (SOS) and Senegal deep offshore South (SOSP). But the tender for this last block (SOSP) may be sealed by litigation. Ouestaf News has tried to find out more.

As soon as the tender was published in the media, Africa Petroleum Corporation Limited (APCL), with the State of Senegal, sounded the alarm to recall that a contract already binds it to Senegal on this block or the company holds 90%.

The tender published in early October 2018 in the Senegalese national daily, Le Soleil, by the Senegalese Ministry of Petroleum and Energy, invites interested companies to come forward, stating that they have until October 31 to submit their records.

Senegal: the oil still in debate

But here, for Africa Petroleum Corporation Limited, Senegal does not have the right to put this block on the market.

"The contract (which binds APLC to the State of Senegal on the block SOSP)" has not formally expired, "according to Ben Romney, in charge of relations with the media at APLC.

In an e-mail exchange with Ouestaf News, Mr Romney further states: "APCL remains the legitimate owner of this block and in no case should it be subject to a call for expressions of interest".

Ouestaf News tried to have the version of the government of Senegal, but as in several other "hot" files that concern him, the request remained unfulfilled.

Ouestaf News first sent an email to Mr Thierno Ly, technical advisor number 1 at the Senegalese Ministry of Petroleum and Energy (signatory of the call for tenders mentioned above), for clarification. Mr. Ly did not wish to react directly and recommended in accordance with the "administrative procedures" to send a letter accompanied by an interview protocol to the Minister of Petroleum and Energy in person.

A letter has been filed since November 09, 2018 at the ministry level. To date, no answer has reached us. Also relaunched by email, the ministry still has not reacted.

A decree of 2011

So what says the 2011 decree on which relies ACPL to challenge the tender procedure launched by the Senegalese government?

Research has allowed Ouestaf News to know more: a decree approving the APCL contract on the SOSP block was signed on November 2, 2011 by President Abdoulaye Wade and cons-signed by then Prime Minister Souleymane Ndéné Ndiaye.

Previously, dated 25 October 2011, it was Karim Wade at the time, Minister of State, Minister for International Cooperation, Land Transport and Energy, who had submitted the introductory report his signature.

In this decree it is written: "This contract is signed for an initial research period of three (3) years, renewable twice, for a period of three years for the first renewal and for a period of two decimal five (2, 5) years for the second renewal, ie a total research period of 8.5 years ".

Based on the contents of this text, the contract binding the two parties should effectively end in mid-2019.

In support of his argument, the oil company recalls that the SOSP block is currently being arbitrated by the International Center for Settlement of Investment Disputes (ICSID), a Washington-based body of the World Bank.

In January 2018 APCL filed a request for arbitration at the level of the ICSID after the Senegalese authorities refused the requested renewal.

Our inquiries confirm that this request exists: an arbitration file numbered ARB / 18/24 has been registered by ICSID on July 11, 2018. The State of Senegal is in this case represented by its Judicial Officer .

"We were surprised to see that the SOSP block is subject to a call for expressions of interest while being arbitrated at the ICSID level," said the Director General of APCL, Jens Pace in a statement dated 08 October. Pace also said in the same statement that he sent a warning letter to the Senegalese authorities.

"African countries that have poorly negotiated their mining and oil contracts lose a lot in disposals," said the Senegalese economist Chérif Salif Sy, during a debate organized in late October 2018 by the think tank AfrikaJom on transparency in the sector mining and oil in Senegal

The London-based company is also awaiting ICSID arbitration between it and the Gambian state for the same reasons. According to Reuters, these two cases have melted the company's share of 90% in 2018.

Towards another scandal?

While Senegal has not yet produced a drop of oil, this sector remains undermined by controversy and a series of scandals.

Public opinion is still waiting to be enlightened on the nebula that became Petro-Tim affair , with the research license issued to this company led by Frank Timis and whose subsidiary Senegal was administered at the time of the facts by the brother cadet of the President of the Republic, Aliou Sall.

The ins and outs of this case were the subject of a special report by the State Inspectorate General, a report that is still not made public.

We also remember the contracts awarded to the French Total, which have a time in the headlines and have pushed the former Minister of Energy, Thierno Alassane Sall, to resign his position with a roar.

The former minister today political opponent of the President of the Republic said he refused to sign the contract with Total, which will put the "Senegalese in a hole," according to his remarks.

With suspicion growing, the government is struggling to prove its good intentions with regard to transparency in this sector. Since October 2016, a process has begun to publish certain mining and petroleum contracts, including the two research and production sharing contracts awarded to Total.

Senegal has joined the Extractive Industries Transparency Initiative (EITI), whose standard 2.4 "encourages countries to make public all contracts and licenses that set out the terms and conditions for the exploitation of oil, gas and ores. ".

Despite these efforts, some Senegalese continue to take a suspicious look at the management of their oil and gas. On the website dedicated to the publication of these contracts, that of Petro-Tim (who had subsequently sold his shares to Kosmos Energy) and those signed with APCL are not yet put online.

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