Latest update November 29th, 2024 1:00 AM
Senegal loses billions of dollars after awarding gas blocks to unqualified company
Kaieteur News – Would you give someone who has never built a house before, all your savings to construct your dream home?
Would you allow someone who is not a doctor to perform surgery on you?
Would you let someone who has never studied dentistry extract one of your rotten teeth?
The obvious answer to these questions is a resounding NO!
It is clear that experience and a proven track record in a particular area are critical qualities to consider before giving a person or a company, an important job to do. Furthermore, if an individual would consider these two factors in their decision making process then it is expected that a government would do the same.
Expert on Oil Sector Corruption, Alexandra Gillies.
Controversial businessman, Frank Timis.
President of Senegal, Macky Sall.
Aliou Sall, the brother of Senegal’s President.
Unfortunately, this is not always the case says Expert on Oil Sector Corruption, Alexandra Gillies. In her most recent analysis that examines Senegal’s petroleum industry, Gillies said that the administration that is led by President, Macky Sall, gave away two of his nation’s most prime offshore gas fields to a company that has zero experience, much less a proven track record of safe development of such resources.
In her report, Gillies noted that Frank Timis, a Romanian-Australian businessman with a corrupt past and no experience in offshore exploration, created a company called PetroTim in 2012 and registered same in the Cayman Islands. After creating that company, Gillies noted that he used it to gain the rights to two offshore concessions, Saint Louis and Cayar, the same year.
Two years later, he created another shell company called Timis Corporation, registered same in the British Virgin Islands, and hired the brother of the President, Aliou Sall, to run the show. It is important to note that the President’s brother also has little to no experience in deep water exploration and production.
Less than two months after registering the new company and hiring the President’s brother, the company started selling out the interest in the gas fields as it lacked the finances to do honour to the exploration programme.
Gillies noted that Timis Corporation sold 60 percent of the shares to American oil company Kosmos in 2014 for over US$400M. That same year, Kosmos found major natural gas reserves. The United Kingdom (UK) oil giant British Petroleum (BP) subsequently joined the partnership and acquired 30 percent of the blocks’ interest which saw Timis getting more than US$200M.
In 2017, BP then bought out Timis Corporation for US$250M. That company had held the remaining shares in the gas blocks. BP also agreed to pay Timis at least US$12B in royalties over a 40-year period. In total, Timis made approximately US$900M in cash within five years of acquiring the blocks and today, the 55 year-old is set for life with at least US$12B more to follow.
Considering this glaring theft of the nation’s prime gas assets, Gillies said companies which have no track record or experience in the industry as well as little to no finances or assets to carry out the required work programmes, are clearly not qualified to own oil and gas assets. The oil expert stressed that it is a glaring red flag that always warrants scrutiny by civil society.
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