Mamadou Faye: Critiques Sénégal's 2019 Code Pétrolier, Deters Investment

• Mamadou Faye, former Petrosen CEO, critically assessed Senegal's 2019 petroleum code, calling it overly rigid and fiscally unattractive to international investors.
• He noted the state's share increased to approximately 80% under the new code, deterring investment compared to the previous 66%.
• Faye expressed skepticism about the viability of major projects like Grand Tortue Ahmeyim (GTA) due to rising costs and declining demand, and the Yakaar-Teranga project without export plans.
• He clarified the $55 million dispute with Cosmos Energy, stating the company had met its contractual obligations and owed nothing to the state.
• The former director advocated for a deep reform of the petroleum code and institutional reorganization, including transferring operational management to Petrosen.

His analysis highlights a critical challenge for attracting and retaining foreign direct investment in the nation's burgeoning energy sector.

Mamadou Faye, a distinguished geophysicist and former Director General of Petrosen, offered a comprehensive critique of Senegal's oil and gas sector governance and future trajectory during a recent appearance on RFM's "Grand Jury" program on Sunday, September 20, 2026. Drawing on his extensive experience as the former head of the national oil company, Faye presented a critical assessment of the period following significant discoveries and the prevailing regulatory framework. He contended that the initial discourse surrounding natural resources was excessively politicized, a factor that ultimately influenced authorities to enact the 2019 petroleum code.

Faye specifically characterized the 2019 petroleum code as overly restrictive, asserting that it established rigid, non-negotiable fiscal parameters. Under this revised framework, the state's share in petroleum projects reportedly escalated to approximately 80%, a substantial increase from the previous 66%. This significant shift in fiscal terms, according to Faye, acts as a deterrent for the majority of international companies, discouraging them from investing in Senegal's sedimentary basin due to perceived unfavorable conditions. His analysis highlights a critical challenge for attracting and retaining foreign direct investment in the nation's burgeoning energy sector.

The former Petrosen chief also addressed the recent signing of a memorandum of understanding with Italian energy giant ENI for the evaluation of five offshore blocks. Faye cautioned against overly optimistic expectations, clarifying that this agreement pertains solely to preliminary geological studies, rather than firm exploration or production-sharing contracts. He further noted that ENI appears to favor acquiring blocks in neighboring Gambia or Côte d'Ivoire, where the fiscal regimes and potential profitability are considered more attractive than those currently offered in Senegal. This observation underscores the competitive regional landscape for oil and gas investments.

Turning to major ongoing projects, Faye raised concerns about the economic viability of certain fields. For the Grand Tortue Ahmeyim (GTA) gas project, he pointed to a significant increase in investment costs, which have risen from an initial $5 billion to $8 billion. Coupled with a downward trend in European gas demand, these factors render the project's exploitation particularly challenging and potentially unprofitable under existing financial arrangements. Similarly, he expressed skepticism regarding the economic realism of the proposed West African gas pipeline, connecting Nigeria to Morocco, citing its estimated cost of $25 billion as a major hurdle.

Regarding the Yakaar-Teranga project and the associated Gas-to-Power strategy, Mamadou Faye argued that Senegal's domestic consumption, primarily from Senelec and cement factories, is insufficient to justify the substantial development investments required. He deemed the target of achieving a Final Investment Decision (FID) by 2027 unrealistic without prior certification of reserves and the establishment of a comprehensive economic model that incorporates export capabilities. Instead, he suggested allocating a portion of the gas from the Sangomar field to meet the nation's immediate energy and industrial requirements, offering a pragmatic alternative to current plans.

On the legal and financial fronts, Mamadou Faye voiced doubts about the government's initiative to renegotiate existing contracts, predicting that it would not yield substantial positive outcomes. He explained that the current profitability rates for operators are already at their lowest, leaving little room for further concessions. Faye also provided clarification on the contentious $55 million dispute related to Cosmos Energy's withdrawal from the Yakaar-Teranga block. He asserted that Cosmos Energy had already fulfilled its contractual obligations concerning work commitments and therefore owed no funds to the Senegalese state, effectively dismissing the basis of the dispute.

In light of these challenges, the former Director General advocated for significant institutional restructuring and a deep reform of the petroleum code. His recommendations included transferring the operational management of the mining domain directly to Petrosen and streamlining the overall governance of the sector. He also addressed past controversies surrounding the 2017 contract with Total, affirming that his actions consistently aligned with the strategic interests of the Senegalese state. These proposals highlight a perceived need for greater efficiency, transparency, and a more investor-friendly regulatory environment to unlock the full potential of Senegal's hydrocarbon resources.

Lawyers advising clients on oil and gas investments in Senegal should note the critical assessment of the 2019 petroleum code's rigidity and its impact on investor attractiveness, signaling a challenging environment for new projects and potential for future regulatory reforms. This highlights the need for careful due diligence on existing contractual terms and fiscal conditions, and to monitor calls for a deep reform of the petroleum code.

Source: Original reporting via SenePlus