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Senegal adopts new oil code, targets bigger stakes

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Senegal wants to maximize earnings in its oil and natural gas projects even as the African nation revamps its oil code.

A document obtained by Bloomberg shows that the country is considering raising royalties and taking a bigger stake in oil and natural gas.

Revising its oil code is pivotal as a string of discoveries off the country’s coast could make it become an oil exporter in the coming years according to Bloomberg.

Senegal is expected to partner with explorers including BP Plc and FAR Ltd.

The state company’s carried stake in exploration projects is proposed to remain unchanged at 10 percent, according to the document. Whereas royalties can currently vary from 2 percent to 10 percent, the new code proposes fixed percentages, depending on the nature of the operation.

A principal analyst for sub-Saharan Africa at Wood Mackenzie, Lennert Koch said that the adoption of the new code would help dissipate uncertainty over regulations and accelerate investments in Senegal.

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