Oil report

UPDATE 2-Senegal's new energy bid process to ensure transparency - state firm

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CAPE TOWN, Nov 7 (Reuters) - Senegal’s new legally binding bid process will ensure the transparency of a new oil and gas licensing round, the managing director of the national oil company said on Thursday.

“Today we are setting new laws on the transparency we need to have. Everything that is done upstream will be transparent so that people will know what’s going on,” Petrosen’s Mamadou Faye told Reuters.

“When it comes to the licensing round, door-to-door or direct negotiation will be avoided when we can do otherwise. People used to think that by this negotiation there was a lot of corruption -- they thought (this), but it was not true.”

At the annual Africa Oil Week conference in Cape Town on Tuesday, Senegal announced a new oil and gas licensing round for three offshore blocks.

Senegal’s ambitions to become a major oil and gas producer have been overshadowed by allegations in a BBC report that a brother of President Macky Sall was involved in fraud related to two offshore gas blocks.

The brother, Aliou Sall, has denied the allegations and called the BBC report “totally false”. Faye said Senegal’s judiciary was investigating the matter.

Senegal, where oil was discovered in 1961, expects its offshore projects to come online between 2022 and 2026.

According to the International Monetary Fund, between 2014 and 2017, reserves were found containing more than 1 billion barrels of oil and 40 trillion cubic feet of gas, most of it shared with Mauritania.

Faye said a new structure codified into law would involve all bids coming before an evaluation committee from various ministries, Petrosen and outside advisers.

Its report must be publicised and any concerns by companies or the government heard and addressed by the same body.

Senegal has an “Energy Master Plan” that involves channelling the new reserves into an expanded refinery system to produce domestic power as well as fertilisers.

“It will be social transformation for 60% of the population that works in agriculture,” Faye said, adding that he hoped energy revenues would be used to diversify the economy.

With recent finds promising billion-dollar payoffs within a decade, it hopes to learn from the mistakes of other producers in Africa, where income inequality remains profound and patronage systems are fed by oil wealth.

“We learned a lot from the neighbouring countries about the transformation of their countries ... we have to develop industry that will help the other economic sectors.” (Reporting by Noah Browning; Editing by Tanisha Heiberg, Edmund Blair and Dale Hudson)