A major energy asset in Senegal could cost $7.5 billion as the nation nears full ownership

Senegal has noted that it would take the allocation of $7.5 billion to develop an offshore asset, the Yakaar-Teranga gas field, capable of changing its national energy landscape. According to the chief executive officer of Petrosen’s trading arm, Mouhamadou Diop, the project is expected to markedly alleviate the nation's fiscal burden regarding energy subsidies, which currently surpass $1 billion per year. Upon commencement of operations, the gas field is projected to enhance domestic energy security and mitigate dependence on imported combustible fuels. Kosmos Energy, an American upstream oil company, identified the Yakaar-Teranga field around a decade ago, which is considered one of Senegal's most promising natural gas assets. Along with the adjacent Grand Tortue Ahmeyim project, it has raised Senegal's profile as an emerging hydrocarbon producer. The agenda of the West African country extends beyond electricity generation, as seen on Bloomberg. Senegal hopes to use natural gas as a platform for industrial expansion, particularly in fertilizer, petrochemical, steel, and cement industries, which are viewed as important to long-term economic growth. Early on in the Yakaar-Teranga development, the British multinational oil and gas company, BP Plc, left the project in 2023, after tagging along as an early investor. “We produce oil, but we remain a net importer of refined petroleum products,” Diop said. “The goal is to use revenues that you get from the oil and gas to actually invest it in exploration, to be an operator and develop the project ourselves,” he added. Kosmos’s exit would effectively end its 90% operating stake in the field, leaving PETROSEN as the sole operator. The company had previously indicated that it could exit the block if no commercially viable development plan or suitable partnership structure was secured, reflecting ongoing challenges in advancing the project toward final investment decisions. The project has been designed to be developed in phases. The first stage, expected to cost $2.5 billion, seeks to supply around 300 million cubic feet of gas per day to the domestic market. A second, larger phase, worth around $5 billion, would concentrate on downstream industrial growth. Senegal's attempt to strengthen control over its energy resources is part of a broader trend in Africa, where governments seek greater ownership of critical natural resources. “Properly structured offtake contracts, often 15 to 20 years, can support project debt of investment-grade quality,” Diop explained. That incentive has risen since the start of production at the Sangomar Field in 2024, marking the country's first significant step toward oil production. Senegal’s plan for Yakaar-Teranga Senegal's Ministry of Energy, Petroleum, and Mines revealed its policy approach to the Yakaar-Teranga project at the MSGBC Oil, Gas & Power Summit in Dakar on December 10, 2025, noting in an official communiqué that its strategy "does not in any way imply nationalisation" of the asset. The announcement at the time reaffirmed Kosmos Energy as a strategic partner and stated that PETROSEN would inherit the licence when it expires in July 2026, in accordance with current contractual obligations. It stated that Senegal's upstream policy structure is guided by consistency, investor confidence, and respect for agreements. However, the policy framing has since been accompanied by stronger political language from within government. In a separate public remark reported by Reuters, Energy Minister Birame Souleye Diop later said Senegal “wants to nationalise” the project and entrust PETROSEN with its development to meet domestic gas needs, highlighting a more assertive state-control orientation alongside the formal contractual transition timeline.