Senegal leads opportunity boom in the MSGBC Basin
In the context of what PwC's Africa oil & gas review 2019 describes as an exciting growth phase for the continent fueled by large oil and gas discoveries and subsequent increased investor appetite, the MSGBC Basin shines through one of the most exciting areas of frontier exploration in the region. Read on to find out how recent discoveries and a stable operating environment is steadily allowing Senegal to guide the world's attention to the MSGBC Basin and establish its place within the West African landscape of oil & gas producing nations.
The MSGBC Basin within the wider West African Context
According to TGS's Director of Business Development for Africa, Ben Sayers, “the MSGBC Basin can be set separately from the rest of Africa from a variety of different perspectives. Most importantly, it is not a basin but a collection of mini-sub-basins which gives it a unique geological perceptive that means that multiple play types and hydrocarbon phases can be found co-located in the larger picture. For instance, large oil plays are sourced from completely different source rocks to the gas discoveries. ”
Recent world-class discoveries in Senegal and Mauritania coupled with the announcement of an upcoming licensing round by Senegalese Oil and Energy Minister Mahamadou Makhtar Cisse are indeed steadily establishing the country's regional hub for oil and gas activity in West Africa. Discussing the basin in the wider West African context, Sayers highlighted in fact that “the MSGBC basin gained a lot of benefit from the infrastructure and development that has recently seen Ghana rise to become an oil exporting nation.” He added that “the time from discovery to production in the Jubilee and TEN fields has had a knock-on effect on the expectations of the Mauritanian and Senegalese governments, driving the cycle time down to looking at discovery to production in under 8 years in both the Sangomar field and the GTA complex."
The political and business landscape
Politically, Senegal also benefits from a stable business climate that has recently been described as an “island of stability and prosperity and security” by Ambassador Nathan Sales, the US coordinator for counterterrorism. Similarly, Sayers shared that “the MSGBC Basin has proven itself to be a taxally responsible and stable enclave that will enable the region to compete with the other African oil nations of Angola, Nigeria and Ghana.” And while Ambassador Sales added that he envisioned “ a role in the region for Senegal to play as an exporter of security, ”recent LNG projects and investments in infrastructure could see the country's exports much more than that in the near future.
Furthermore, from a geographical perspective, Sayers added that “the region's joint cooperation is a sign of how stable the region is for investment; the AGC zone between Guinea-Bissau and Senegal has been functioning for over 25 years and the GTA complex development on the border of Senegal and Mauritania reinforcements the need for strong partnerships between governments and between IOCs. TGS see a lot of future potential in the basin and over the last few years the company has acquired lots of geophysical data to provide a library or about 40,000km2 or new 3D and about 72,000kms or 2D data. The basin has proven reserves or over 50 TCF or gas and over a billion barrels of oil,
This not to say, however, that challenges do not exist. The changes to the Senegalese Petroleum Code at the beginning of 2019, along with reforms to local content regulations, were for instance with some debate. These reforms were in direct response to the major oil and gas discoveries made between 2014 and 2016 and arrived at a time the country was entering the production phase. Main changes related to a) the allocation of hydrocarbon titles that will now be done through a tender procedure open exclusively to legal persons; b) a new legal regime establishing the State's participation in the production sharing contract; and c) an expansion of local content provisions. At a time when some African countries are incentivising E&P activity through changes to their regimes,
Looking to the future: Regional opportunities for networking
It was recently announced that the MSGBC Basin Summit & Exhibition taking place on January 28-30 in Dakar will host the launch of the country's first offshore licensing round, which will be open for six months, until the end of July 2020, and will include 10 offshore exploration blocks. Sam Scarpa, Director - Africa for the Oil & Gas Council who host the gathering, highlighted that "we are committed to the MSGBC Basin and our partners in the region - we are proud That the summit, now in its 4th year, has played a key role in the development of the basin and we look forward to seeing how these exciting developments will shape the future of the region. ”
Joseph Medou, PETROSEN's Exploration & Production Director expressed that the summit is “important for Senegal and PETROSEN because it's a way to gather all the IOCs, all the service companies and the banks to let them know what is really happening in the sub-region. We believe we need to collaborate between the countries that share the basin together, exchange knowledge and see how we can work together. ”Similarly, Mamadou Fall Kane, Deputy Permanent Secretary for COS-PETROGAZ highlighted the dedicated Local Content Forum day on January 28 is a “unique rendezvous of the oil and gas industry actors in the MSGBC Basin is also a major opportunity for all stakeholders to gather to learn about, discuss and criticize initiatives in the region targeted at building,