Long before its first crude oil starts to flow, Senegal is already embroiled in massive energy contract scandal involving the president’s brother, Aliou Sall and UK oil major, BP.
The British Broadcasting Corporation (BBC) recently published an investigation alleging that in a previously unpublished arrangement, BP agreed to pay Timis Corporation, a company run by Romanian-Australian tycoon Frank Timis, around $10 billion in royalty payments for its stake in the blocks Cayar Offshore Profond and St. Louis Profond.
Early history of the acreage reveal it contains one of the largest deposits of gas in the world.
The blocks, currently operated by BP, have caused controversy since 2012, when a previously unknown company called Petro-Tim was unexpectedly awarded the licence to explore them despite having no known track record in the industry. Soon after, the president’s brother was hired at the company.
The BBC alleged that Timis in 2014 secretly paid $250,000 to a company run by Aliou Sall called Agritrans, based on documents it reviewed. Timis also paid Aliou Sall $1.5 million in salary over five years for his work in Petro-Tim, the company originally given the blocks before Timis Corporation, and that he was also offered $3 million in shares in Timis companies.
Protests against the deal erupted in the capital Dakar in 2016 during President Sall’s first term. Opposition leader Ousmane Sonko said citizens should demonstrate again.
Also, an influential group of opposition organisations called the Conference of Leaders, which includes former and current senior politicians said “the public prosecutor must immediately initiate actions to unravel fraudulent and corrupt contracts.”
In a quick reaction, BP in a statement “rejects any implication that it acted improperly in the acquisition of our interests in Senegal” and that it “conducted extensive and appropriate due diligence” before acquiring the license. It said the $10 billion figure quoted by the BBC was “wholly inaccurate”.
Aliou Sall also denied receiving the payment and called the BBC’s report “totally false”.
The African Energy Chamber in a statement rejected the accusations made by the BBC and believes “the case is about a sinister rush to judgment, an obsession to taint a reform-driven President and the oil industry at any cost and by any means, and certainly without an understanding of the facts and how the oil industry works”.
“BP’s acquisition of the blocks is well in line with the current tendering processes applied in Senegal. BP conducted extensive and appropriate due diligences to ascertain the ownership and operation of the block. This was the same with Kosmos Energy”, stated African Energy Chamber.
The Chamber added that “the oil industry is about risk. People who take risk need to be compensated. BP and Kosmos Energy are strong companies with great plans for Senegal, and very good track records in doing business in Africa. It is unfair for them to be demonized in this fashion when all the facts are not reviewed”.
All eyes are now on Senegal’s justice ministry who has asked prosecutors to launch an inquiry into the energy contracts. President Macky Sall said the truth would be established although the government’s first response was to dismiss the allegations as false.
Senegal’s offshore oil and gas reserves have the potential to transform the country with volumes expected to rival some of the region’s biggest producers.
FRANK UZUEGBUNAM
