Immediate controversy greeted Senegal Minister of Energy Mouhamadou Makhtar Cisse’s delayed bid to launch the country’s 2020 licensing round by offering 12 vacant offshore blocks, including deep and ultra-deep acreage.
The round, the timing of which has recently been under threat, was launched at the Africa Oil Week conference in Cape Town on Tuesday.
The map and official brochure presented to industry delegates by Cisse and state-owned Petrosen E&P director Joseph Medou clearly showed blocks designated as vacant that are currently the subject of international arbitration, negotiation or otherwise in dispute.
French supermajor Total is unequivocally shown as operator of the Rufisque Deep and the Senegal Offshore South Deep (SOSD) block is shown as open acreage up for grabs, whereas PetroNor is currently defending its title to both blocks in the International Court for the Settlement of Investment Disputes (ICSID).
“PetroNor notes that Senegalese authorities included SOSD in a recently launched licensing round covering all open blocks, (yet) PetroNor subsidiary African Petroleum Senegal Ltd. remains in arbitration proceedings with the government of Senegal and continues to reserves its rights to a 90% operating working interest in the block,” a statement released by PetroNor chief executive Jens Pace and chief financial officer Stephen West read.
PetroNor insisted Senegal’s move to promote these blocks “had no impact on the arbitration process and that the PetroNor board remains steadfast in its legal position and looks forward to having the matter resolved through either the independent channels of arbitration or via a satisfactory settlement agreement in the interest of all parties".
To the east of SOSD, located off the southern Senegal province of Casamance, lies the Senegal South Shallow Offshore (SSSO) block, which operator Elenilto claims remains valid through 2021.
The Elenilto board also reacted swiftly to Petrosen’s promotion, insisting that “SSSO is not free, Elenilto Senegal LLC remains the legal owner of its licence,” while it is understood that confidential negotiations were under way with a potential farm-in partner.
“We were shocked and surprised to see the presentation by Petrosen in Cape Town because to the best of our knowledge and legal opinion this block is not free," the company said.
"While we welcome negotiations in principle, nonetheless we will take legal action against any entity that shall bid to buy our block without first obtaining our consent.”
It is understood that Elenilto earlier contended that former minister of energy Thierno Sall had not been entitled to revoke the SSSO licence by letter, arguing that only the presidency could legally rescind the licence.
Smaller players onshore Senegal had earlier been urged by the ministry to relinquish their licences and re-apply but Elenilto resisted, subsequently participating in an official working committee, attended by Petrosen, which agreed on the technical exploitation of a structure straddling the boundary with PetroNor’s SOSD block.
Upstream hears there is ministerial support for the idea of re-allocating both blocks as one licence but neither incumbent seems willing to allow title to slip away without litigation as majors and mid-tier players have demonstrated interest in this acreage.
China National Offshore Oil Corporation (CNOOC) inked a non-intervention agreement in Beijing with Elenilto back in 2015, London sources indicated, while further excitement was generated last month when Australian explorer Far Ltd estimated combined prospective resources of 1.2 billion barrels on Gambian shelf edge blocks A5 & A2, which it shares 50/50 with Malaysia’s Petronas.
Elenilto insists it does not have any quarrel with the Senegal government but would not hesitate to sue any company for trespass if the legal position is not resolved before Petrosen proceeds to roadshows planned in London and Dakar prior to official launch on 31 January 2020.
Petrosen's Medou told delegates the tender phase would remain open for six months with applications to be submitted no later than 31 July with awards expected by year-end.
In addition to the disputed Casamance deep and shallows, Senegal aims to attract interest in the Casamance ultra-deep blocks OUP South-1 and OUP South-2, and six ultra-deep blocks to the north, designated OUP North 1-6.
The remaining two blocks represent acreage relinquished by BP and Kosmos Energy, the Saint Louis Offshore Deep-2 and Cayor Offshore Deep-2.