Moving from heavy dependence on imports to local production inevitably calls for structural change. That is the conviction of distribution players, independents and majors alike.
“This discovery should sow the seeds of sustainable growth. That calls for transparency, to avoid the oil curse. We need transparency rules, because the human resources are there.”, warns Ameth Guissé (ASP), who heads some twenty small distribution companies. But for Babacar Tall, there is a crucial question to ask. “What should we do with this oil? To put it plainly, the oil windfall is like a medicine: used well it cures; used badly it can become a real poison.”, says the head of the ASPP, citing the example of Norway.
This country made “prudent” use of its oil resources — unlike Nigeria, Angola or Congo, where oil turned into a real nightmare. “Oil has never been a curse; it is an opportunity. The curse comes from states mismanaging it and from leaders' greed. Faced with an oil windfall, our leaders can be tempted to think the fields are inexhaustible. A rentier mindset then sets in, with oil revenue making up the bulk of the country's income. Leaders no longer have any strategy, and their rentier outlook stifles all diversification and innovation in the economy, killing off enterprise. If that windfall is badly distributed and misused, it widens inequality and creates a vicious circle with all its damaging consequences: corruption, complacency, nepotism, social and political unrest… war. Let us take inspiration from Norway, and recently Saudi Arabia, and create a sovereign wealth fund,” he warns.
Restarting the SAR: an overriding priority
Producing oil is one thing; refining it is another. And the least one can say is that, even though Senegal has a refinery, it is far from international standard. That leads Mouhamed Seck (Sahel Distribution), who is also Secretary General of the ASP, to say that without the SAR, the independents do not exist. “The normal arrangement is that the SAR imports the crude, refines it, gives it to us and we take it to our stations. The oil discovered must benefit Senegalese people first. For that, the SAR — which today imports all its crude — must stop importing and manage to absorb the crude it needs from these discoveries. That raises the question of rehabilitating and rebalancing the SAR. It has to be brought up to standard. The SAR has just reached 1.1 million barrels, and to be profitable it needs to get to 3 or 4 million barrels a year. If it does, Mali, Gambia and others will no longer be obliged to source their oil elsewhere,” he argues.
As for Jorge Fernandes (API), the first to open a station after the sector was liberalised, he suggests that Senegalese people should be kept informed. “We need to keep a sense of proportion. Production and loading will all happen out at sea. Young people need to take an interest in exploration and, later on, work along those lines,” he advises.
