Keypoints:
- Senegal plans $7.5bn offshore gas development
- Yakaar-Teranga project targets domestic energy supply
- Petrosen seeks greater control over gas resources
SENEGAL is accelerating a $7.5bn plan to develop the offshore Yakaar-Teranga gas field in a move authorities hope will cut costly energy subsidies, reduce fuel imports and support a broader industrial transformation drive in West Africa.
State-owned energy company Petrosen estimates the deepwater gas asset contains roughly 25 trillion cubic feet of recoverable gas, making it one of the country’s most strategically important energy projects.
The development marks one of Senegal’s biggest energy ambitions since the country entered the ranks of oil-producing nations in 2024 through the Sangomar offshore project. Earlier this year, Senegal reported oil output of 36.1m barrels in 2025, underlining the country’s growing role in West Africa’s energy sector.
Domestic energy strategy takes shape
The Yakaar-Teranga project has become central to Dakar’s plans to reshape the country’s energy mix and reduce dependence on imported fuels.
According to Petrosen officials, Senegal currently spends more than $1bn annually on energy subsidies, largely tied to electricity generation and fuel imports. Authorities believe domestic gas production could sharply reduce those costs over the coming years.
The government also wants natural gas to support electricity generation and support energy-intensive industries including fertiliser, petrochemicals, steel and cement production.
The project is expected to be developed in phases. The first stage, estimated at roughly $2.5bn, would focus on supplying around 300 million cubic feet of gas per day to Senegal’s domestic market. A second downstream industrial phase could cost a further $5bn.
The strategy reflects a wider push by African governments to capture more value from natural resources rather than exporting raw commodities.
Senegal joins countries including Mauritania and Mozambique in betting on gas development as a driver of industrial expansion and long-term energy security.
Analysts at the African Energy Chamber say domestic gas monetisation could help Senegal stabilise electricity prices, improve energy security and attract manufacturing investment across the region.
The country has also been moving to strengthen domestic refining capacity. In a separate milestone, Senegal refined locally produced oil for the first time, signalling efforts to retain more energy value within the national economy.
Petrosen takes greater control
Senegal’s government has increasingly moved to strengthen state control over strategic energy assets.
The Yakaar-Teranga field was initially discovered by US-based energy company Kosmos Energy about a decade ago. However, disagreements over the project’s commercial direction and development model eventually led to a shift in ownership dynamics.
Kosmos confirmed in late 2025 that it was seeking either a new development partner or a commercially viable arrangement with Senegalese authorities before its licence expiry in July 2026.
In April 2026, Senegal formally took over the field following the company’s withdrawal, granting Petrosen exclusive rights to the project without compensation, according to Offshore Energy.
Earlier, energy giant BP had also exited the Yakaar-Teranga project in 2023, although it remains involved in the separate Greater Tortue Ahmeyim gas project offshore Senegal and Mauritania.
Prime Minister Ousmane Sonko has repeatedly signalled that his administration wants a more assertive national role in resource management and contract negotiations. In 2024, Senegal launched a review of oil and gas contracts as part of efforts to secure greater national benefit from strategic resources.
Financing challenge remains
Despite the project’s scale, financing remains one of the largest hurdles facing Senegal.
Petrosen executives say the government could combine regional bond markets, development finance institutions and diaspora-backed capital to raise funding. Long-term gas supply agreements are also expected to play a role in securing project debt financing.
Energy analysts say the project’s success will depend on balancing domestic energy needs with investor confidence, especially as Senegal seeks to position itself as a reliable frontier hydrocarbon producer.
Authorities insist the development will prioritise local economic benefits over large-scale exports.
During a working meeting in Dakar earlier this year, Senegal’s Ministry of Energy urged Petrosen to accelerate preparations for a final investment decision, including technical studies, environmental assessments and financing structures.
The project is also expected to influence broader regional energy dynamics as West African countries seek new revenue streams and industrial growth opportunities amid global energy transition pressures.
The project is likely to become a major test of Senegal’s ambition to turn natural gas wealth into long-term industrial growth.
