Contributed By Houda Law Firm
According to the provisions in Article 5 of Law No 2019-03 of 1 February 2019 on the Petroleum Code (the Petroleum Code or PC), all petroleum resources belong to the Senegalese people.
The Minister in charge of Hydrocarbons and the Société des Pétroles du Sénégal (PETROSEN), which is the national petroleum company, are the governmental bodies responsible for the implementation of the Hydrocarbons Policy, in addition to the Institution for the Promotion of the National Sedimentary Basin. They also represent the interests of the State in the hydrocarbons sector (Articles 3 and 4, PC).
However, in October 2016, the government created by decree the Oil and Gas Strategic Policy Committee (Comité d’Orientation Stratégique du Pétrole et du Gaz – COS-PETROGAS), whose purpose is to support the optimal exploitation of oil and gas resources for the benefit of the population.
The Minister in Charge of Hydrocarbons
This is the supervisory entity in charge of the implementation and monitoring of the government's policy for the oil and gas sector. According to the Petroleum Code, the Minister is responsible for the operations of the oil and gas sector and is in charge of:
The National Petroleum Company Known as PETROSEN
PETROSEN is responsible for implementing the oil policy of Senegal. In collaboration with the Hydrocarbons Directorate, PETROSEN prepares and negotiates all oil contracts with petroleum companies that apply for mining titles or service contracts. These companies subsequently negotiate and sign a Partnership Agreement with PETROSEN.
In addition, it ensures the technical follow-up and control of oil operations related to the Directorate of Hydrocarbons.
This committee is responsible for providing strategic guidance and defining and overseeing policies regarding the development of hydrocarbons. It is integrated within the Office of the President of the Republic of Senegal. Its main roles and responsibilities include defining, monitoring and verifying the implementation of the national oil and gas policy, implementing hydrocarbon project development programmes, approving local content, mobilising funds and ensuring compliance with good governance practices.
The Petroleum Code provides that the State will undertake oil operations on its own account, either directly or through the national oil company, or through several persons or companies of its choice.
To this end, in May 1981 Senegal established the national petroleum company known as PETROSEN, with a 99% State participation.
PETROSEN is under the supervision of the Ministry of Energy and is charged with the implementation of Senegal's oil and gas policy. It is active in the upstream, midstream and downstream oil and gas sectors. In the upstream oil and gas sector, its mission is to evaluate the country's hydrocarbon resources, to promote the expansion of these resources by international petroleum companies, to supervise oil exploitation and to monitor compliance with contracts. PETROSEN is therefore in charge of the elaboration and negotiation of all oil agreements that are signed by the Ministry of Energy and the petroleum companies. PETROSEN is entitled to a contributory participation in any exploitation project within a range of 10%, up to the maximum rate stipulated in the petroleum agreements (generally 20%). To this end, it is a signatory to the Joint Exploitation Agreement (JOA) concluded with the oil companies. In the downstream oil and gas sector, PETROSEN is a strategic player in the refining process.
PETROSEN's website is currently "under development": www.petrosen.sn.
The Petroleum Code has reconsidered all the positive aspects of the previous code of 1998 and has made other improvements, regarding the following in particular:
Moreover, on 24 January 2019 the national assembly adopted Law No 2019-04 relating to the local content in the hydrocarbons sector. This Law refers to all the initiatives taken to promote the use of national goods and services, as well as the development of the participation of national labour, technology and capital in the entire value chain of the oil and gas industry.
However, some fields related to the oil sector, namely labour, environment and health and safety, are governed by specific regulations that are independent of the Senegalese Petroleum Code.
The most important legal source for the upstream oil industry is the Petroleum Code and its application decree, although the decree is not yet available.
According to Article 3 of the Petroleum Code, the Minister in charge of Hydrocarbons is the competent authority to issue contracts regarding petroleum.
Subject to compliance with the provisions of the Petroleum Code, the State may authorise one or more natural or legal persons of its choice to undertake the first upstream phases through a prospecting authorisation or an exploration permit.
The hydrocarbon prospecting authorisation grants its holder the non-exclusive right to carry out preliminary hydrocarbon prospecting work, within the limits of its zone, excluding drilling at a depth of more than 200 m, unless otherwise provided for in the prospecting authorisation (Article 15, PC).
As the rights associated with the prospecting authorisation are subject to the limit of non-exclusivity, several prospecting authorisations or a mining title may thus be granted concurrently in the same area (Article 16, PC).
The hydrocarbon exploration authorisation grants its holder the exclusive right to carry out all work, within the limits of its zone, including drilling, for the purpose of searching for and discovering hydrocarbon deposits, in accordance with the terms of the petroleum contract attached to said authorisation (Articles 17 and 18, PC).
Hydrocarbon deposits are exploited in the territory of the Republic of Senegal by means of a temporary exploitation authorisation granted by order of the Minister in charge of Hydrocarbons, or an exclusive exploitation authorisation granted by decree (Article 26, PC).
The provisional operating authorisation issued by the Minister in charge of Hydrocarbons authorises one or more legal entities to operate the productive wells on a temporary basis for a maximum period of six months, during which it continues the delimitation and development of the predetermined deposit (Article 27, PC).
The exclusive exploitation authorisation issued by the State allows one or more legal persons to carry out hydrocarbon exploitation activities in a given area on an exclusive basis – the exclusive exploitation zone. Any commercial discovery of hydrocarbons made by the holder of a hydrocarbon exploration licence shall give him the exclusive right, in the event of an application before the expiry of that licence, to be granted an exclusive exploitation licence covering the area of the commercial discovery.
The exclusive exploitation authorisation shall be granted to the holder for an initial period not exceeding 20 years. Upon the expiry of that initial term, the authorisation may be renewed once only, by decree, at the request of the contractor, for an additional period of not more than ten years. Renewal will not be automatic (Article 29, CP).
The granting of mining titles for hydrocarbons is accompanied by the signature of an oil contract that sets out the rights and obligations attached to the mining titles for hydrocarbons. The holder of an oil contract is subject to the payment of a signature bonus, to the benefit of the State, which is not recoverable in respect of petroleum costs and corporation tax, the terms and conditions of which are set out in the contract (Article 7, CP).
The oil contract must take the form of a production sharing contract or a service contract.
On the one hand, the service contract constitutes a contract between the State, via the national oil company (in this case PETROSEN) to which is delivered the mining titles of hydrocarbons necessary for the oil operations, and a contractor who carries out activities in an exploration zone or one or more exploitation zones, in the name and on behalf of the State, at its exclusive risk and financial and technical expenses. In the event of the discovery of a commercial deposit, the contractor will receive a specified or determinable amount as remuneration, payable in cash or in kind.
On the other hand, a production sharing contract allows the contractor to carry out, in the name and on behalf of the State, activities in a given area at its exclusive risk and financial and technical expenses. It receives in remuneration a portion of the production from any commercial hydrocarbon deposit located within each exploitation zone for which it has been granted an exploitation permit.
Depending on the case, the production sharing contract may take the form of an exploration and production sharing contract or an exploitation and production sharing contract (Article 2, PC).
The allocation of blocks opened by decree to oil operations on which hydrocarbon mining titles may be granted is carried out by means of a call for tenders or direct consultation. The terms and conditions of implementation are laid down by decree. The petroleum contract for the allocation of blocks is negotiated by the Minister in charge of Hydrocarbons (Article 12, CP).
Authorisation for hydrocarbon prospecting is granted by order of the Minister in charge of Hydrocarbons in areas not covered by a hydrocarbon mining title for a maximum period of two years.
Authorisation for hydrocarbon exploration is granted to the holder by decree for an initial period not exceeding four years.
At the request of the holder, the hydrocarbon exploration licence may be renewed, at most twice, by decree, for a period not exceeding three years each time. At the end of the initial period or of the first renewal and by way of exception, the holder may benefit, by decree, from an extension not exceeding one year, provided that he has begun work and has provided the required technical evidence. The second renewal period may be extended, by decree, for the time required to continue work on the evaluation of a discovery (Article 19, PC).
The provisional operating permit is issued by the Minister in charge of Hydrocarbons for a period of six months. The provisional exploitation authorisation becomes automatically null and void upon the expiration of the exploration authorisation, unless an application for an exclusive exploitation authorisation is filed. The procedures for processing applications for provisional exploitation authorisations and for withdrawal shall be laid down by decree (Article 27, CP).
Moreover, the granting of the provisional or exclusive exploitation authorisation is subject to a nationality criterion, since such authorisations are issued only to one or more legal persons under Senegalese law (Article 7, CP).
The production sharing contract, attached to the exploration authorisation, is transmitted by the Minister in charge of Hydrocarbons to the Minister in charge of Finance, for advice on the fiscal and customs financial provisions. The latter shall be deemed to be in conformity if no action has been taken on the request by the end of a period of 21 days from the date of receipt of the request. The production sharing contract shall be signed by the Minister responsible for Hydrocarbons, PETROSEN and the applicant(s) for the hydrocarbon exploration licence. The contract is approved by decree and published in the Official Gazette (Article 20, CP).
Typical tax conditions for upstream licences include the following:
The tax regime applicable to income from upstream transactions is as follows:
The Petroleum Code and the General Tax Code provide for a number of exemptions and other tax and customs benefits, such as an exemption from the Lump-sum Contribution payable by the employer, the Lump-sum Minimum Tax, the Land Tax, and the Local Economic Contribution. There is also an exemption from VAT on imports, supplies and services carried out for the benefit of the holder of the petroleum title or his subcontractors.
With the exception of the statistical royalty and community levies, the holder of an oil contract and his subcontractors are exempt from all customs duties and taxes during exploration, evaluation and development periods, including the levy of the Senegalese Shippers' Council (COSEC), for the importation of certain goods listed in Article 49 of the Petroleum Code. They also benefit from the suspension of import duties and taxes for goods that can be re-exported or transferred after use.
PETROSEN acts in its own name or on behalf of the State in the field of hydrocarbons. Its tasks include the following, among others:
Regarding this last point, the State, through PETROSEN, reserves the right to participate in all or part of the oil operations, by associating itself with the holders of an oil contract or an exploration licence.
The modalities of participation are specified in the petroleum contract or the prospecting authorisation. However, the shares of the national petroleum company are of a minimum of 10%, carried by the other co-holders of the mining title of hydrocarbons, in exploration and development phases, including redevelopments, with an option to increase this participation up to an additional 20% in development and exploitation phases not carried by the other co-holders of the mining title of hydrocarbons (Article 9, CP).
The Petroleum Code provides for the possibility for national private investors with technical and financial capacities to participate in oil risks and operations as well as in all subcontracting, supply and service contracts relating to oil operations.
Senegalese companies will also be able to benefit from the oil operations as oil contract holders, and companies working on their behalf under local content provisions are subject to:
Senegalese employees with equal qualifications may be recruited on a priority basis for carrying out oil operations on Senegalese territory.
In addition, oil contract holders must provide a security deposit to a first-rate financial institution for the rehabilitation and restoration of the sites, under the conditions set out in the oil contract (Article 59, CP).
All these provisions are developed by Law No 2019-04 dated 24 January 2019 relating to local content in the hydrocarbons sector.
The mining title for hydrocarbons shall be issued exclusively to legal persons demonstrating the required technical and financial capacity (Article 10, CP).
Any commercial discovery of hydrocarbons made by the holder of a hydrocarbon exploration authorisation shall give said holder the exclusive right to be granted an exclusive authorisation to exploit the area of the commercial discovery, if applied for before the expiry of the hydrocarbon exploration authorisation (Article 29, CP).
The application for an exclusive exploitation authorisation must be accompanied by a plan for the development and exploitation of the commercial discovery in accordance with the model of the development plan report defined by decree. The development plan submitted by the operator is approved by order of the Minister in charge of Hydrocarbons.
The holder of an exclusive exploitation authorisation shall also undertake to diligently carry out development work on the commercial discovery concerned, and to exploit the discovery in accordance with international standards and practices in use in the oil industry and in accordance with the petroleum operations regulations in force in Senegal (Article 32, CP).
Where the limits of a commercial deposit straddle several exploration authorisations, the holders who each have their own exclusive exploitation authorisation on the part of the deposit zone shall sign a unitisation agreement, which shall be communicated to the Minister in charge of Hydrocarbons with the related programmes within 15 days from the date of signature. The holders of exploitation authorisations have a period of one year to draw up a joint exploitation programme (Article 60, CP).
The holder of an exploration authorisation may waive his rights at any time, in whole or in part, subject to giving three months' notice and in accordance with the terms of the production sharing contract.
The holder must carry out any abandonment work required to protect the environment. If the contractor renounces his rights to the entire exploration area without carrying out the entire minimum work programme, the contractor shall, within 15 days of the renunciation, pay compensation to the State for the cost of the work yet to be carried out during the current exploration period.
The holder of an exclusive operating licence may waive it in whole or in part, after giving one year's notice. In the event of a partial or total waiver, the holder of a production sharing contract shall carry out the abandonment work. It shall take all necessary measures to safeguard the environment in accordance with the environmental and social impact assessment (Article 33, CP).
The products resulting from the exploitation of hydrocarbon deposits are intended either for local consumption or for export. Under the conditions set out in the oil contract, holders of exclusive exploitation authorisations must allocate, as a matter of priority, the proceeds from their exploitation to cover the needs of the country's domestic consumption. In this case, the transfer price reflects the international market price (Article 59, CP).
The Petroleum Contract may include a clause to stabilise the legislative and regulatory context on the date of entry into force, allowing the contractors and the State to require either the non-application of financially aggravating new legal provisions, or an adjustment of the contractual provisions. This stabilisation clause does not cover additional costs caused by a change in regulations concerning the safety of persons, environmental protection, the control of oil operations or labour law, unless such changes are not in conformity with international practice or are applied to a contractor in a discriminatory manner (Article 72, CP).
Under the conditions laid down in the Petroleum Code, mining titles for hydrocarbons are transferable and transmissible to legal entities that have the technical and financial capacity to carry out oil operations. Deeds of assignment or transfer of mining titles are transmitted to the Minister in charge of Hydrocarbons for approval.
In the transfer of a participating interest of one of the members of the contracting group to a company affiliated to said member, only a prior declaration addressed to the Minister in charge of Hydrocarbons is required (Article 61, CP).
Any transfer of shares of a member of the contracting group or of a company directly or indirectly controlling a member of the contracting group shall be treated as a transfer of interests for the purposes of this Code if it results in a change of control, unless the change of control is the direct result of a transaction on an official stock exchange. Any change of control shall be notified to the Minister in charge of Hydrocarbons within ten days of its effective date (Article 62, CP).
There are no legal or regulatory restrictions on production rates. However, there are restrictions on the allocation of production in the sense that the obligation to supply the local market specified in Article 59 gives priority to the local market for the products of exploitation by holders of exclusive authorisations.
The legal framework applicable to the midstream and downstream sectors in Senegal is regulated by Law No 2020-06 of 7 February 2020 on the Gas Code (the Gas Code) and by Law No 98-31 of 14 April 1998 relating to the activities of importing, refining, storage, transporting and distributing hydrocarbons.
The Petroleum Code of 2019 only governs the upstream activities of the oil and gas sector. Only a few midstream provisions relating to transport are included in this code.
The activities of importing, refining, exporting, storing, transporting, distributing and marketing hydrocarbons are regulated by Law No 98-31 of 14 April 1998.
The provisions of the Petroleum Code also specify conditions of nationality and capacity to access to the Senegalese midstream and downstream market.
The hydrocarbon transport authorisation provided for in Article 35 of the Petroleum Code is issued by order of the Minister in charge of Hydrocarbons, exclusively to any legal entity under Senegalese law that can demonstrate the technical and financial capacity to carry out hydrocarbon transport activities.
The Gas Sector
The Minister in charge of Hydrocarbons implements the policy defined by the Head of State for activities in the intermediate and downstream segments of the gas sector (Article 4, Gas Code).
A licence must be obtained in order to carry out import, export, re-export, aggregation, transformation, storage or supply of natural gas, and for the transport and distribution of liquefied and compressed natural gas (Article 7, Gas Code).
This licence is also granted only to any legal Senegalese entity that can demonstrate the necessary technical and financial capacity.
The licence is awarded to legal persons governed by Senegalese law to tender or direct consultation by order of the Minister responsible for hydrocarbons according to rules to be laid down by decree.
The licence is granted by order of the Minister in charge of Hydrocarbons and is accompanied by specifications defining the operator's obligations (Section 8).
A concession must be granted for the transport or distribution of natural gas by pipeline (Article 10, Gas Code).
This licence is also granted only to any legal entity governed by Senegalese law that can demonstrate the necessary technical and financial capacity.
There is no national monopoly on downstream activities.
The Gas Code provides for a licence or concession regime, depending on the gas operations envisaged. Such licences or concessions are granted by order of the Minister in charge of Hydrocarbons.
The procedures for implementing the call for tenders and direct consultation are set by decree, as are the conditions of admissibility of the application. These decrees have not yet been published.
The granting of a licence or concession for downstream gas activities, including the construction of gas infrastructure, is subject to the completion of a prior environmental assessment and the obtaining of an operating permit under the regulations on facilities classified for environmental protection.
With regard to gas, downstream activities require a licence to be obtained from the Minister in charge of Hydrocarbons.
The downstream distribution activity is subject to obtaining a licence if it concerns liquefied and compressed natural gas (Article 7, Gas Code), or subject to obtaining a concession if it concerns natural gas distribution by pipeline (Article 10, Gas Code).
For hydrocarbons, Law No 98-31 of 14 April 1998 provides for an obligation to obtain a licence to this effect from the Minister in charge of Hydrocarbons for downstream activities.
Downstream distribution activity to supply the national market also requires a licence to this effect to be obtained from the Minister in charge of Hydrocarbons.
Unlike upstream operations, typical tax terms are not provided for midstream/downstream operations. Article 2 of the Petroleum Code defines "petroleum operations" as all activities and operations for the prospecting, exploration, evaluation, development, production, storage, transport or marketing of hydrocarbons, including the processing and liquefaction of natural gas, but excluding operations for the refining, distribution and marketing of oil and gas products. Thus, it can be inferred from this definition that the refining, distribution and marketing of oil and gas products would constitute a second phase, which is the downstream phase.
With regard to commercial arrangements, Article 38 of the Petroleum Code provides that the holder of a hydrocarbon transport authorisation must accept the passage of hydrocarbons from other deposits, against payment of an amount fixed by order of the Minister in charge of Hydrocarbons.
The Petroleum Code does not provide for a special regime for downstream operations, so the ordinary law regime remains applicable. As a non-exhaustive example, the following taxes and duties may be cited:
No special right is given to domestic companies regarding downstream activities.
Activities in the intermediate and downstream segments of the oil and gas sector are subject to compliance with the rules set forth in the Law on Local Content in the Hydrocarbon Sector and its implementing decrees.
Indeed, the law relating to local content in the hydrocarbons sector applies to all activities on the territory of the Republic of Senegal that are related, directly or indirectly, to the transport and storage of hydrocarbons, and to the transformation and valorisation of hydrocarbons, as well as the distribution of oil and gas products.
Under these provisions, the use of national goods and services is prioritised, such as services and supplies from Senegalese companies and Senegalese personnel when they have the required skills, and residents of local communities or those surrounding oil and gas operations for unskilled jobs.
In addition, the local content plan of each contractor, subcontractor, service provider and supplier shall specify the measures taken to enable Senegalese nationals to acquire the necessary qualifications and expertise to gradually replace non-national employees (Article 7).
Goods and services related to oil and gas activities are provided by Senegalese companies if there are companies able to do so; otherwise, a foreign company may be hired.
Any investor wishing to act as a subcontractor, service provider or supplier is obliged to register with the Trade and Personal Property Credit Register.
If activities are subject to prior licensing, such licences are granted by order or approved by decree in the case of a concession.
The applicant for a licence or concession must provide information on the beneficial owners of the company.
Accordingly, the granting of a licence or concession for intermediate and downstream gas activities is subject to the completion of a prior environmental assessment and the obtaining of an operating permit under the regulations on facilities classified for environmental protection.
Pursuant to the Gas Code, the licence may be renewed by the Minister in charge of Hydrocarbons, after receiving advice from the Regulatory Body, and the concession may be renewed by decree at the request of its holder.
Licence or concession holders may assign or transfer their licences or concessions to legal entities that have the required capacities under Senegalese law (Article 18, Gas Code).
There is no provision on "condemnation/eminent domain rights" in Senegal other than those applicable in the event of expropriation for reasons of public utility.
However, the Petroleum Code does contain provisions on the regulation of relations with owners. Thus, relations with owners and occupants of the land are governed by the regulations in force in Senegal.
However, no holder of an oil contract may occupy or carry out oil operations without the prior authorisation of the competent authority on lands that are:
The Gas Code contains provisions on third party access to infrastructure.
It is thus provided that operators of gas transmission and distribution networks and storage facilities must guarantee freedom of access for third parties and comply with the principles of tariff transparency, equal treatment and non-discrimination (Article 27, Gas Code).
The holder of a hydrocarbon transport permit must accept the passage of hydrocarbons from other deposits, subject to compatibility with the conditions of use of the transport infrastructure referred to in Article 35 of the 2019 Petroleum Code and within the limit of available surplus capacity.
The use by third parties of the transport infrastructure held by a transport authorisation holder gives rise to the payment of a tariff fixed by order of the Minister in charge of Hydrocarbons.
A case of joint installation has also been anticipated. Indeed, if several hydrocarbon discoveries are made in the same geographical area, the operators join forces for the construction and/or joint use of installations and pipelines for the disposal of all or part of the production from these discoveries.
In the absence of an agreement, the Minister in charge of Hydrocarbons asks the operators to join together for the execution of such activities (Article 38, PC).
Senegalese law provides for restrictions on the sale of gas products, with priority to be given to domestic consumption.
Under Article 59 of the Gas Code, there is an obligation to supply the local market.
Although the proceeds from the exploitation of hydrocarbon deposits may be intended either for local consumption or for export, holders of exclusive exploitation licences must allocate, as a priority, the proceeds from their exploitation to cover the needs of the country's domestic consumption.
The transfer price must reflect the international market price.
Once the domestic needs of the country have been met, free export is possible after the payment of an exit customs duty, set at 1% of the value of said production share.
Any legal entity planning to carry out export activities must first obtain a licence from the Minister in charge of Hydrocarbons, which is granted for a period of five years (Article 38, Gas Code).
Re-export activities are also subject to obtaining a licence from the Minister in charge of Hydrocarbons.
The Petroleum Code provides that the share of production accruing to the holders of exclusive exploitation authorisations, after satisfaction of the country's domestic needs, may be freely exported after the payment of an exit customs duty, set at 1% of the value of said share of production, deductible for the determination of the profit subject to corporate income tax (Article 59, CP).
Licensees or concession holders carrying out activities in the intermediate and downstream segments of the gas sector are subject to the taxes, duties and fees for which they are liable in accordance with the provisions of the General Tax Code (Article 63, Gas Code).
In addition, licensees or concession holders carrying out activities in the intermediate and downstream segments of the gas sector are subject to the payment of taxes in accordance with the provisions of the Customs Code (Article 64, Gas Code).
Law No 98-31 of 14 April 1998 also provides that any company planning to carry out petroleum storage activities to supply the national market or for export purposes must first obtain a licence from the Minister in charge of Hydrocarbons.
The Gas Code contains provisions relating to the assignment or transfer of licences or authorisations for downstream activities.
According to Article 18 of the Gas Code, licence or concession holders may assign or transfer their licences or concessions to legal entities under Senegalese law that have the required capacities in accordance with the provisions of this Gas Code.
The acts of assignment or transfer, accompanied by all the agreements agreed between the parties, are transmitted to the Minister in charge of Hydrocarbons for approval, by decree, after advice from the Regulatory Body.
The Minister in charge of Hydrocarbons may refuse to approve any assignment or transfer that may directly or indirectly affect the general interest or public security.
The taxation applicable to assignments and transfers is governed by the provisions of the General Tax Code.
Any assignment or transfer concluded in violation of the provisions of this Article shall be null and void.
Incentives and investment protection measures in general are taken to support investors, particularly in the extractive industries sector.
Measures under the Investment Code
Investment incentives under the Investment Code include the following:
The process of granting advantages to foreign investment is as follows:
Disputes arising from investment contracts can be settled through international arbitration or conciliation, as provided for in agreements between the parties or in bilateral investment treaties.
An investor has free choice of jurisdiction and laws within the framework of its individual agreements with its partners.
Benefits granted include the following:
The investor is obliged to do the following:
Benefits Arising from the Petroleum Code
The following benefits arise from the Petroleum Code:
Incentives and Benefits under the Tax Code
Incentives and benefits under the Tax Code include the following:
Senegal's environmental regulatory framework is mainly based on two texts:
In addition to these two main texts, Senegal has put in place a number of decrees that complete the legal framework in the environmental sector, such as:
The environmental regulatory bodies are as follows:
The Directorate for the Environment and Classified Installations is represented at the regional level by the Regional Directorates for the Environment and Classified Installations (DREEC).
Any development project or activity likely to harm the environment will require an environmental assessment, as will policies, plans, programmes, and regional and sectoral studies.
This environmental assessment, which is necessary and mandatory, makes it possible to anticipate and manage the negative impacts of the project, but also to examine the consequences, both beneficial and harmful, that a proposed development project or programme will have on the environment, and to ensure that these consequences are duly taken into account in the design of the project or programme.
It includes environmental impact assessments, strategic environmental assessments and environmental audits.
The impact study is prepared at the expense of the promoter and submitted by him to the Ministry in charge of the Environment, which issues a certificate of authorisation after receiving technical advice from the Directorate of the Environment and Classified Establishments.
The certificate of authorisation signed by the Director of the Environment is sent to the operator and the authorisation order is signed by the Minister in charge of the Environment, after receiving the opinion of the ministerial departments concerned, and bearing authorisation to operate the Classified Installations.
The purpose of this procedure is to obtain a certificate of environmental compliance (a Ministerial Order) issued by the Minister for the Environment after the technical committee (administration and management unit of the environmental impact study) has given its opinion.
Environmental impact studies are carried out by approved engineering and design offices.
After receiving the project, the Technical Committee has ten days to reply to the promoters on the nature of the studies to be carried out (impact notice or terms of reference for a comprehensive study) through the examination of the environmental impact assessment report for the project in question.
If the environmental impact assessment report conforms with the specifications, the Directorate for the Environment and Classified Establishments organises a public hearing in co-operation with the project proponent and the administrative authority of the locality concerned.
Following this public consultation, a report on the public hearing is prepared by the secretariat. The project proponent examines the public concerns and submits a final report to the technical committee, which integrates the environmental and social management plan.
The order on the certificate of conformity is submitted for ministerial signature with the endorsements of the public inquiry report, the opinion of the investigating officer appointed by order of the Governor, the opinion of the Regional Development Committee (CRD) and the inspection report of classified facilities, and is intended for the examination of the authorisation application file.
Offshore development falls within the regime of Installations Classified for the Protection of the Environment (ICPE).
ICPE are industrial, artisanal or commercial installations operated or owned by any natural or legal person, public or private, and all other activities, factories, workshops, depots, construction sites and quarries that present either dangers to health, safety, public health, agriculture, nature and the environment in general, or inconveniences for the neighbourhood.
Installations classified for the protection of the environment (ICPE) are divided into two classes. The first class includes facilities whose operation can only be authorised on the condition that measures are taken to prevent hazards or inconveniences to health, safety, public health, agriculture, nature and the environment in general, or inconveniences to the neighbourhood. Such facilities must be located away from dwellings.
The second class includes installations that do not present serious inconveniences as mentioned above, so are subject to general requirements designed to ensure the protection of such interests.
Thus, ICPE are subject to the supervision of the administrative authority and to the ICPE-specific regime of declaration and authorisation.
The application for authorisation of a first-class facility must be subject to a public inquiry.
Class 1 facilities defined as presenting a risk of "serious danger or disturbance" with regard to "health, safety, public sanitation, agriculture, nature and the environment in general" are subject to the permit system. A thorough environmental assessment study is carried out to determine the environmental consequences in the economic analysis of the project.
Offshore is subject to the authorisation regime of ICPE, Class 1 / A1100 and A1200.
Facilities classified for environmental protection are subject to duties and taxes.
Oil operations are also conducted in accordance with the Environmental Code, as well as other national and international texts relating to the hygiene, health and safety of workers and the public and environmental protection.
The companies carry out their work using proven oil industry techniques and take the necessary measures regarding the following:
The costs of work necessary for the protection of the environment are the responsibility of the holder of the petroleum contract in accordance with the regulations in force (Article 53, CP).
In accordance with Article 64 of the Petroleum Code, if the State does not take over the installations and equipment upon the expiry and termination of the petroleum contract, the holder must carry out the dismantling and removal of such, at its own expense, as well as all other work of abandonment and rehabilitation of the sites. Failing this, the Minister in charge of Hydrocarbons shall order the necessary steps to be taken at the expense of the holder out of the deposited funds.
In the same way, in the case of partial or total renunciation, the holder of a production sharing contract shall carry out the abandonment works, taking all necessary measures to safeguard the environment in accordance with the environmental and social impact assessment.
The main laws on climate change are as follows:
However, these laws do not contain specific provisions on petroleum operations.
As far as is known, no limits are imposed by the authorities on the exploitation of oil and gas.
However, all oil operations in Senegal require the authorisation of the Senegalese authorities; the regime for such authorisations is defined in the Petroleum Code.
As yet, there are no regulatory texts relating to the regulation of non-conventional upstream interests. Consequently, there is no special regime relating to it.
The Gas Code regulates the activities, on the national territory, in the intermediate and downstream segments of the gas sector, including the following:
This law also regulates the conditions for obtaining licences for the operation, production and marketing of liquefied natural gas.
The Local Content Law is also applicable to this sector (see 3.7 Local Content Requirements Applicable to Midstream/Downstream Operations)
In its perspective of development, the Republic of Senegal wishes to attract investors, especially foreign investors. To this end, incentives and advantages are provided to facilitate the installation, research, exploitation and marketing of oil and gas resources throughout the country. It is in this context that the Petroleum Code, the 2019 Local Content Act and, most recently, in February 2020, the Gas Code have been introduced. Senegal has joined the Extractive Industries Transparency Initiative (EITI).
The oil sector has a social policy consistent with the implementation of a collective agreement specific to the sector and measures to ensure that companies and workers observe the rules on safety at work and respect for the environment.
One major recent change is the entry into force of Law No 2020-06 of 7 February 2020 on the Gas Code.