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Elimane Haby Kane

June 17th, 2019

Senegal: a petro-scandal revealed

1 comment | 8 shares

Estimated reading time: 3 minutes

Elimane Haby Kane

June 17th, 2019

Senegal: a petro-scandal revealed

1 comment | 8 shares

Estimated reading time: 3 minutes

Recent investigations into petroleum contracts in Senegal have uncovered a lack of transparency and signs of corruption. Following the discovery of large oil and gas reserves, the Senegalese government must enact policies to protect the interests of its citizens, says Elimane Kane, by enforcing legal frameworks and ensuring responsible management.

The management of petroleum contracts in Senegal is starting to yield its secrets: an investigation by BBC Africa Eye/Panorama has uncovered questionable financial arrangements between BP, a British multinational oil firm; a London-based Australian-Romanian businessman, Frank Timis; and Aliou Sall, the brother of the Senegalese president, Macky Sall.

Ever since the discovery of significant on- and off-shore oil and gas reserves in the West African country, there have been calls for transparent and inclusive regulatory policies giving Senegalese citizens the ultimate control over the governance of this booming sector. However, the challenges in persuading the government to achieve that aim would appear to be every bit as sizeable as the recent (and potential) petroleum discoveries in the Senegal sedimentary basin.

Questions have long been asked, for example, over the awarding of a licence to the firm Petrotim that allowed it to develop the St-Louis block of the Grand Tortue Ahmeyim gas field on the Senegalese coast near the Mauritanian border. Furthermore, a contract signed in 2012 between the State of Senegal, represented by President Macky Sall, and Petrotim, represented by Frank Timis, has been the subject of denunciations and judicial reviews which have so far remained unresolved.

On 19 June 2012, President Sall signed decrees 2012-256 and 2012-597 relating to the Cayar Offshore Profond and St-Louis Offshore Profond concessions. These agreements awarded exploration and sharing contracts to Petrotim, which committed to pay exploration costs of $48 million dollars (24 billion CFA Francs) on the St-Louis block. On 23 August 2013, President Sall signed two decrees that would extend the initial research period, including decree 2013-1154 relating to the St-Louis Offshore Profond block. According to the Ministry of Energy, Petrotim’s investments totalled only about $2 million at this point.

On 3 July 2014, Petrotim transferred the entirety of its 90% stake in the contracts signed with the Senegalese national oil company Petrosen to Timis Corporation Ltd, which in turn signed a transfer agreement of 60% of its stakes to Kosmos Energy Limited. Then in 2017, Timis Corporation sold the remainder of its shares, 30%, to BP, and was thus bought out of the shareholding of the company.

All of these transactions have been the subject of widespread denunciations, complaints and even street protests, which have largely fallen on deaf ears. When opposition political parties and citizens demanded an investigation, Prime Minister Mohammed Dionne responded by directing them to an Extractive Industries Transparency Index (EITI) report published in 2016. However, the EITI report avoids answering the questions of greatest concern by mentioning from the outset that the aim of the procedure agreed between the national committee and the independent adjudicator was neither to conduct an audit or a limited review of revenues from extraction, nor to uncover mistakes or illegal acts or other irregularities, beyond the mission agreed in the initial terms of reference. Since then, subsequent EITI reports have failed to discuss any commercial transactions between Timis Corporation and BP that implied financial benefits for the Senegalese state.

But the BBC Panorama and Africa Eye report, broadcast on 3 June, drawing on journalist Mayeni Jones investigation of relevant background documents, succeeded in calling international attention to the murky dealings that the EITI report had stayed silent on. It reported that BP agreed to pay around $10 billion (6,000 billion CFA Francs) to Frank Timis’ firm, along with between $9 billion and $12 billion in royalties – transactions that were not reported as agreements made between the companies involved and the State of Senegal, and therefore remained secret.

Following these serious revelations, LEGS-Africa is calling for further investigation of these suspicions of corruption, conflicts of interest and the non-transparent management of Senegal’s oil and gas resources, and it demands that light be shed on these serious allegations and the responsible parties clearly identified.

To that end, LEGS-Africa has launched a petition calling on citizens to mobilise to urge the country’s National Office for the Fight Against Fraud and Corruption (OFNAC) to undertake due diligence, and for the Public Prosecutor to refer this matter to the Court of Justice to open an inquiry into the activities of Frank Timis, BP and Aliou Sall. LEGS-Africa also demands that, in order to facilitate the inquiry process, Mr Aliou resign from his public post during the investigation.

Simultaneously, LEGS-Africa is urging Senegalese citizens to call for government policies that will defend the interests of the Senegalese people and ensure that the country’s oil and gas resources are responsibly managed. Finally, LEGS-Africa is initiating contacts with British and international organisations to pursue a judicial inquiry in the UK of BP for its involvement in secret commercial transactions which contravene the requirements of both international legal frameworks and the EITI.

Photo credit: Flickr, wsquared photography

Elimane Haby Kane is an Atlantic Fellow for Social and Economic Equity at the LSE’s International Inequalities Institute. An expert in governance, international development and project management. He was program officer, then executive director of Forum Civil, the Senegalese section of Transparency International. He is a founding member of the pan-African think-tank LEGS-Africa.

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Elimane Haby Kane

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