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OPINION: Sall can sidestep strife in Senegal

President can weather the storm whipped up by claims surrounding Petro-Tim dealings

OPINION: Senegal is reeling from the impact of last month’s BBC broadcast purporting to incriminate President Macky Sall, his brother, top officials and oil companies of malfeasance in the award of two licences to Petro-Tim, a vehicle associated with Romanian-Australian businessman Frank Timis.

Later farmed out to Timis Corporation, Kosmos Energy and BP, the St Louis Offshore Deep and Cayar Offshore Deep blocks are believed to host 50 trillion cubic feet of gas, with first LNG shipments from the Greater Tortue-Ameyhim (GTA) complex straddling Mauritania’s maritime boundary expected in 2022.

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So it is a pretty big issue, calling into question due diligence carried out by both BP and Kosmos, not to mention the probity of officials and politicians presiding over one of Africa’s most stable economies.

And mud sticks.

Both companies and Timis repudiate all accusations of impropriety and a high-level team from BP visited Sall at the end of June to tell him so.

Yet insiders worry that the brouhaha may hit investor confidence in the administration and impact financial markets.

State-owned Petrosen plans a fresh licensing round in October, while Kosmos aims to farm down its GTA stake to 10% this summer, meaning BP and neighbouring Mauritania must satisfy themselves of any newcomer’s technical capacity and financial wherewithal.

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For work to continue and to secure project financing, BP must first tie up loose ends, including regulatory and fiscal accords, and know for certain with whom it is working.

Nor can the government afford any slip-up.

GTA phase one should deliver $14 billion in revenue over 30 years, according to Kosmos, but a substantial delay may jeopardise projected revenue streams if shipments are made to miss the market.

Servicing external debt is a challenge. Senegal has Africa’s second-highest external debt-to-gross domestic product ratio and only narrowly hung on to its Standard & Poor's B+ rating. And Sall needs to expand, not shrink, his access to capital markets.

He has shown serious intent since assuming office, resurrecting anti-corruption trials and creating a new Ministry for the Promotion of Good Governance — he accepted his brother’s resignation from public office, but not his guilt.

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Doubt has been cast on documents backing the BBC's allegations, which Sall claims are without foundation and were inspired by those trying to destabilise Senegal.

The Petro-Tim deal was in any case signed by his predecessor, just not numbered and gazetted, but his opponents are still baying for blood.

Presidential aspirant Ousmane Sonko is now stirring unrest, joined by ex-energy minister Thierno Sall and former prime minister Abdoul Mbaye who wants Interior Minister Aly Ngouille Ndiaye and Macky Sall himself tried for high treason.

Protesters under the civil society platform Aar Li Nu Bokk have hit the streets, demanding an expert review of oil deals and vowing to keep up the pressure.

So will Sall cave in to Mbaye's demands and call for a review of all upstream contracts, triggering lawsuits from irate licencees? Not likely.

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Will he at least sacrifice his Interior Minister Ndiaye, the Chicago-trained engineer to whom Sall first entrusted the energy portfolio and who arranged the Petro-Tim legacy deal for decree back in 2012? Even less likely.

Ndiaye is the presidency's main link to the traditional Sufi centre of power, an ethnic Wolof with a hotline to the Caliph, the powerful Mouride Brotherhood’s Grand Marabout in the desert city of Touba.

And without Touba onside, as the opposition well knows, Senegal is ungovernable — so this latest crisis will slowly subside.

Sall will survive.

(This is an Upstream opinion article.)

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