Senegal as West Africa’s case study for gas growth potential

The report by Paris-based Institute for Sustainable Development and International Relations (IDDRI), that almost a quarter of all natural gas consumed in the world come from underwater areas is quite instructive especially as it affects the West African region.

This recent discovery shows that West Africa in particular still has untapped natural resources. The region has some of the most untouched, high-potential regions for hydrocarbons.

A case in point is the discovery of the largest deep water gas fields in West Africa by the US Company Kosmos Energy in one of West Africa’s country Senegal. Report indicates that production in the gas fields can translate into a massive windfall for Senegal’s Emerging Plan, which is the government’s economic initiative planned through 2035. The offshore gas reserve extends into both Senegal and Mauritania and is estimated at 450 billion cubic meters.

Industry experts opine that the prospect of Senegal becoming a global gas exporter provides an opportunity for the country to establish energy security; however it also creates uncertainties regarding the country’s ability to hedge environmental risks, mitigate the impact on local coastal communities, and sidestep the traditional resource pitfalls.

Just like Senegal, Nigeria, Ghana, Cote d’ Ivoire as countries in across the West Africa region represents boundless potentials when it comes to the exploring natural resources especially natural gas.

Reports indicate that in a country like Cote d’ Ivoire, there is potential for significant gas finds. However, much of the territory is unexplored and recent finds have not yet been appraised for commerciality.

It is also believed that increasing domestic production over the short/medium term would require high capital investment from explorers, which looks unlikely given the current economic volatility in the upstream industry.

Côte d’Ivoire is estimated to have about 28.3 billion cubic meters of natural gas according to a research carried out by African Energy, adding that this leaves a substantial portion of natural gas yet to be exploited. Investments in exploration and drilling are necessary to uncover the commercial viability of deposits and prevent the decline of production.

As Senegal prepares to join other West Africa countries as a gas exporter, industry close watchers are quick to stress that the country need to put in place measures that would help the country mitigate the effect of the resource curse as witnessed in other countries.

Experts observe that resource curse occurs when countries endowed with natural resources produce less developmental and economic growth than countries with fewer natural resources–as epitomised by African countries like Nigeria, Equatorial Guinea among others.

They argue that perhaps Senegal is better suited than most of its African contemporaries to mitigate the so-called resource curse because it has been so lucky not to have explored natural gas resources early enough.

It is the views of industry experts that discovery of natural gas which would be back up by investment would result in the plugging of a supply gap noticed in West Africa countries.

Analysts opine that for Senegal to attain full value it will need to develop substantial regulation for offshore gas activities to ensure the preservation of marine ecosystems and the economic development of the coastal populations that depend on these ecosystems.

KELECHI EWUZIE