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Senegal’s New Fortune Favours the Locals

Senegal’s Revised Petroleum Code has introduced a provision that goods and services that could be adequately fulfilled by the local private sector must include majority Senegalese ownership of such companies.

The new law calls for a partnership between an international firm and a local entity, maintaining local ownership of at least 5%, in projects in which the local private sector may lack the technical or financial capacity for.

And regarding goods and services which the local private sector is chronically incapable of providing, foreign entities can fulfill these specific industry requirements independently of local partners.

Local Content Development Fund

The Petroleum Code’s Decree 2021-248 of the Revised Petroleum Code formalizes the operations of a Local Content Development Fund under both the Ministry of Finance and Ministry of Petroleum and Energies, funded by levied fines and other budgetary appropriations. The fund’s objectives are to develop more robust local content development guidelines in partnership with private companies and to improve local capacity through technical training and support for SMEs. Chairing this and acting as enforcer for all local content decrees is the National Local Content Monitoring Committee (CNSCL) created by Decree 2020-2047 – a body with the objective of achieving a 50% local content ratio for Senegal by 2030.

The law mandates international oil companies to submit annual content plans outlining their use of local contractors, suppliers and service providers, and justifying any international preferences for the above in terms of lower price or superior standards. It instructs all oil and gas industry service providers and sub-contractors to open a local subsidiary in the country and to submit all tender bids through a centralized government platform.

Originally published in the April 2022 edition of Africa Oil+Gas Report

 

 

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