Senegal Awarded World Bank Loan
The World Bank said May 31 it will provide a $29mn loan to Senegal to strengthen the country’s institutional capacity to negotiate oil and gas deals.
It said this would lay the foundations for the gas sector’s economic contribution through enhanced regulatory frameworks and capacity building.
“The period between the time when resources are discovered to the moment a decision is made on whether and how to develop the resources is critical,” says Riccardo Puliti, head of the bank's energy and extractives division: “Through this technical assistance the World Bank will bolster the government’s capacity to negotiate fair deals and drive negotiations toward successful investment decisions.”
The low, or zero-interest loan, by the bank's International Development Association (IDA) division, has a grace period of six years and a maturity of 38 years. It's hoped it will provide technical assistance to strengthen the government’s capacity to engage effectively with citizens and other stakeholders. But the bank did not say whether the money would go internally or to external agencies, or whether it had made enough use of existing free resources.
A month ago Senegal's president abruptly sacked his energy minister since 2015; the same day a large offshore exploration block was awarded to Total. A small independent explorer, African Petroleum, says it already has the licence. The bank's statement did not discuss such recent events. Total has yet to disclose what if any signature bonus it paid for the block; disclosure is good practice under the Extractive Industries Transparency Initiative.
Interest has heated up. Cairn found oil with its recent tenth well offshore Senegal and the Kosmos-BP partnership is planning an offshore floating LNG project on the back of many large offshore gas finds and hoping to find more oil too. And China's Cnooc has recently farmed into a block off southern Senegal.
Norway shares its technical and regulatory experience from more than four decades of managing oil and gas resources through its Norad-Oil for Development programme with 12 countries. Eight of those are in Africa, including gas-rich Mozambique and Ghana. But Senegal is not yet on its list.
Mark Smedley