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Working Paper 339 - Petroleum Code Reform in Senegal: Economic Implications and Policy Lessons and Cash Transfers

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Abstract

Recent oil and gas discoveries in Senegal have prompted the Government to review its 1998 Oil Code and adopt a new one in 2019. The revision was made with an eye on increasing revenue collection for the State with limited impacts on incentives for investment. In this paper, a three-pronged analysis of the new Senegalese Oil Code is presented. Firstly, a stand-alone analysis of the Code reveals that issues linked to investment cost control is crucial in order to determine a fair share of revenues for the country. Secondly, a comparative analysis of the new Code's fiscal provisions with those of peer countries suggests that it embeds tools to ensure revenues while still catering for investor needs. Lastly, revenue simulations comparing the 1998 and the 2019 codes reveal the high revenue potential of the latter. To ensure that Senegal reaps the full benefits the new oil code provisions, the paper suggests that the creation of an upstream oil and gas regulator with key technical capacities is crucial. Furthermore, articulating any future negotiating position around maintaining most of the provisions of the new 2019 oil code is a must for optimizing resource mobilization from oil and gas exploitation.

Suggested Citation

  • Seydou Coulibaly & Yannis Arvanitis, 2020. "Working Paper 339 - Petroleum Code Reform in Senegal: Economic Implications and Policy Lessons and Cash Transfers," Working Paper Series 2465, African Development Bank.
    • Handle: RePEc:adb:adbwps:2465
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    More about this item

    Keywords

    Gas; Oil; Contract; Law; Public revenue; Senegal JEL classification: E62; E64; K12; K32; L95; Q48;
    All these keywords.

    JEL classification:

    • E62 - Macroeconomics and Monetary Economics - - Macroeconomic Policy, Macroeconomic Aspects of Public Finance, and General Outlook - - - Fiscal Policy; Modern Monetary Theory
    • E64 - Macroeconomics and Monetary Economics - - Macroeconomic Policy, Macroeconomic Aspects of Public Finance, and General Outlook - - - Incomes Policy; Price Policy
    • K12 - Law and Economics - - Basic Areas of Law - - - Contract Law
    • K32 - Law and Economics - - Other Substantive Areas of Law - - - Energy, Environmental, Health, and Safety Law
    • L95 - Industrial Organization - - Industry Studies: Transportation and Utilities - - - Gas Utilities; Pipelines; Water Utilities
    • Q48 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Energy - - - Government Policy

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