Five years of disinterest in Senegal's deep offshore blocks? Hopes of a revival with Petrosen E&P

Senegal's national oil company Petrosen E&P is stepping up its efforts to attract new partners after a period of stagnation in the deep offshore sector.

Since 2019, the deep offshore sector of the Senegalese basin has been facing a growing lack of interest from international investors. Although Senegal is renowned for its major oil and gas discoveries, particularly in its offshore areas, the free blocks in the deep offshore have not generated the hoped-for interest. This lack of interest raises questions about the challenges facing the country in attracting investment to fully develop its energy potential.

However, it seems that a wind of change may be blowing. Petrosen Exploration & Production (E&P), the exploration and production arm of Senegal's national oil company Petrosen, has stepped up its lobbying efforts in recent years through active participation in international conferences, industry meetings and key events. These initiatives are aimed at improving the sector's image and attracting new investors.

2019-2024: A stagnating deep offshore sector

Between 2019 and 2024, despite the optimism generated by the first hydrocarbon discoveries in Senegal, particularly in the offshore zones, the free deep offshore blocks did not enjoy the expected interest. There are several reasons for this:

- Geological and economic risk : Exploiting deep offshore blocks is technically and financially more complex than in shallow areas. This high level of risk may have deterred investors, especially as exploration and production costs can soar without any guarantee of an immediate return.

– Contexte international : The period 2019-2024 has been marked by volatile oil prices and a global energy transition increasingly focused on renewable energies. Investors may have shifted their priorities towards less risky and more sustainable sectors.

- Covid-19 pandemic: The global health crisis has severely affected the oil and gas industries, forcing them to review their investment strategies. Deep offshore projects, often perceived as riskier and more expensive, have taken a back seat to more immediate projects.

Petrosen E&P: A lobbying strategy to reverse the trend

Petrosen E&P was quick to react to this lack of interest. The national company has stepped up its efforts to convince investors of the opportunities offered by the deep offshore blocks in the Senegalese basin.

Participation in international events

Petrosen E&P has taken part in a number of prestigious industry events over the past five years, including :
- African Oil Week: A key platform for players in the continent's energy sector. Petrosen presented the assets of the Senegalese offshore basin, highlighting its favourable regulatory framework and recent promising discoveries.
- The Offshore Technology Conference (OTC) in Houston: One of the world's leading events on offshore exploration technologies, where Petrosen sought to capture the attention of the sector's majors and independents.

Strengthening international partnerships

In addition to the conferences, Petrosen E&P has stepped up its bilateral discussions with major international players, seeking to promote collaborative ventures to revive exploration of free blocks in the deep offshore.

- Technical cooperation agreements : Agreements have been signed with several international companies to share expertise and technical data on Senegal's offshore basins.
- Strategic partnerships : The aim is to attract both the majors capable of raising large amounts of capital and smaller, but agile, companies to diversify the players present on the free blocks.

Results and outlook: fruit to be harvested?

To date, the results of Petrosen E&P's lobbying efforts are beginning to show, albeit in a modest way.

Signs of renewed interest

- Renewed international interest : Some investors, notably independent oil companies, seem to be showing renewed interest in Senegal's deep offshore blocks. This could be a sign that the international market is more favourable to risky projects, as demand for hydrocarbons remains strong and the energy transition moves forward.

- Cost optimisation : Thanks to technological advances and agreements with partner companies, the costs of deep offshore exploration and production could fall, making these projects more attractive.

Long-term outlook

For Petrosen E&P's lobbying to bear fruit in a sustainable way, several elements will be essential:
- An attractive legislative framework : Senegal must continue to improve its legislative and regulatory framework in order to offer competitive conditions to foreign investors, particularly in terms of taxation and legal certainty.
- Diversification of partners : Attracting not only the majors, but also independent companies and emerging players, particularly in renewable energies, could enable the country to maximise its development opportunities.
- Energy transition : It will also be crucial to integrate concerns relating to the energy transition and the reduction of carbon emissions into the development strategies for deep offshore blocks.

The lack of investor interest in the free deep offshore blocks in the Senegalese basin between 2019 and 2024 has highlighted the complex challenges facing the country's oil sector. However, Petrosen E&P's ongoing efforts to revive the sector may well bear fruit in the years ahead. Renewed international interest, coupled with efforts to modernise and innovate technology, could enable Senegal to capitalise on its vast offshore resources and strengthen its position on the global energy stage.