Senegal's PM challenges BP gas deal, freezes Indorama assets

By Jessica Donati and Bate Felix

March 12 (Reuters) - Senegalese Prime Minister Ousmane Sonko vowed on Thursday that sweeping changes were ahead, declaring a BP BP.L gas contract unfair, revoking 71 mining licenses and freezing the accounts of a major Indorama subsidiary until it pays the state roughly 380 million euros ($438 million).

The moves mark the most concrete steps yet from a government that came to power in 2024 promising to audit and potentially renegotiate the West African nation's resource deals and rebuild the country's finances.

"The contracts that have been signed are unfair contracts, which we intend to discuss in detail," Sonko said in a televised statement.

The government review found that a gas contract for the Greater Tortue Ahmeyim project operated by BP was one-sided and unfair.

Sonko said he would publish a document with the details of the contracts studied, which also included fishing and infrastructure. He did not provide specifics about any discussion with BP.

BP did not respond to an email seeking comment.

REVIEW TO BOOST SENEGAL'S FINANCES

Sonko said the renegotiations would rebuild Senegal's finances and boost the economy by delivering cheaper gas to industries as well as the population.

Senegal is grappling with debts that reached 132% of gross domestic product at the end of 2024, according to the International Monetary Fund, which froze its lending program after a government audit discovered misreported debt.

Sonko has previously said the country will not need to implement a restructuring plan, despite what he called a difficult and painful repayment schedule.

Senegal has announced a plan to close 19 government agencies to save money. Tensions have risen at universities over the government not paying students promised financial aid. Meanwhile, teachers' unions have held nationwide strikes over shortages, salaries and taxes.

NATIONALISING YAKAAR-TERANGA PROJECT

Sonko said talks to nationalise the Yakaar-Teranga gas project, operated by Kosmos Energy KOS.N, were nearly concluded and Senegal would retake the block at no cost in the coming weeks. Kosmos Energy, which has a 90% stake, became the operator of the Yakaar-Teranga gas field in 2023 after BP decided to exit.

Kosmos' license for the field runs out in July, the company has said. Kosmos did not respond to emails seeking comment on the terms of the nationalisation.

Sonko did not share updates on Australia's Woodside Energy WDS.AX, which operates Senegal's Sangomar oil and gas field. Senegal became an oil-producing nation when the Sangomar field began production in June 2024.

Sonko said the government has also cancelled the licenses of several blocks such as Diender Offshore, Differe, Cayar Offshore Shallow, St Louis Offshore Shallow and Rufisque Offshore. He said the government was discussing the resizing of blocks, as the previous perimeters were too vast and did not meet international best practices.

SENEGAL FREEZES INDORAMA'S ACCOUNTS

Senegal has frozen the accounts of Industries Chimiques du Sénégal (ICS) until the phosphate and fertilizer company pays the state 250 billion CFA francs (380 million euros), Sonko said. He singled it out as a top offender in the mining sector. Privately owned Singapore-based Indorama Corporation controls ICS.

Indorama did not respond to an email seeking comment.

The government has also revoked 71 mining licenses, including 14 gold licenses, because the companies failed to abide by contract terms.

More broadly, Sonko said many infrastructure projects had overcharged Senegal by an average of 15%, costing the indebted country hundreds of millions of euros.

"We are still a long way from having completed this work," he said, adding that the review would likely continue through his term in office. "We're going to completely change the way of doing things."

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