BP Exits Senegal Gas Field Amid Dispute Over Utilization
Posted 27/11/2023 10:47
BP Plc recently withdrew from the Yakaar-Teranga natural gas field in Senegal due to disagreements with the Senegalese government regarding the gas's intended use. While BP aimed to export the gas, the Senegalese government insisted on utilizing it domestically to fuel power plants, revealed Minister of Oil and Energy Antoine Félix Diome.
The disagreement involved aspects such as daily production capacity, commercial strategy, and the date of the first gas delivery. Diome stated that BP favored exports, while Senegal intended to prioritize developing the gas for the domestic market. Despite the exit, BP left its stake in the Yakaar-Teranga field without receiving any financial compensation.
Dallas-based Kosmos Energy LLC has since increased its stake in the oil field project from 30% to 90%. Additionally, state-owned Petrosen plans to acquire a majority stake in the field.
Senegal views Yakaar-Teranga as a crucial element in its gas-to-power strategy, aiming to boost electrification in the West African nation and reduce fuel prices. The Senegalese government seeks to expedite development at the site, targeting gas delivery by 2026, compared to BP's initial goal of 2028, emphasizing that waiting until 2028 is not feasible for Senegal.
Despite repeated attempts to seek comments from BP, the company has not responded to inquiries outside of business hours.
Yakaar-Teranga, situated off the Senegalese coast, contains approximately 25 trillion cubic feet of gas. Senegal is actively looking for a third partner to secure a 34% stake during the production phase.