Senegal is stepping up efforts to increase the participation of domestic insurance companies in its fast-growing oil and gas industry, as authorities seek to retain more revenues within the local economy.
Government officials, insurers and energy sector stakeholders met in Dakar on May 7 to discuss reforms aimed at expanding the role of Senegalese insurers in covering hydrocarbon-related risks.
The talks, organised by the Technical Secretariat of the National Local Content Monitoring Committee (ST-CNSCL), come as Senegal’s energy industry enters a new phase following the start of commercial oil and gas production.
According to Alioune Guèye, chief executive of Petrosen Holding, local insurers currently capture less than five percent of insurance revenues generated by the country’s hydrocarbon sector.
“It is necessary to ensure that Senegalese companies operating in hydrocarbons capture a significant share of these revenues,” Guèye said during the consultations.
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Officials said strengthening domestic participation in insurance would support Senegal’s broader local-content strategy, which aims to ensure national businesses benefit from the country’s emerging petroleum wealth.
Under Senegal’s 2019 local content law, companies involved in oil and gas operations are required to prioritise local insurance and financial services wherever possible.
The legislation identified finance and insurance as strategic sectors that should benefit directly from hydrocarbon development.
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Despite the legal framework, implementation has remained limited several years after the law’s adoption.
Stakeholders said the challenge stems partly from the relatively small size and limited capital base of Senegal’s insurance market compared with the scale of industrial risks associated with offshore oil and gas operations.
According to industry figures, Senegal had 29 insurance companies by the end of 2022, including 19 firms specialising in property and liability insurance and 10 focused on life insurance.
Industry experts argue that local insurers often lack the financial capacity needed to independently underwrite large energy-sector risks, forcing operators to rely heavily on international insurers and reinsurers.
Mor Bakhoum said insurance should not be viewed merely as a contractual obligation in extractive industries.
“In hydrocarbons and mining, insurance serves as a tool for risk structuring, asset protection and investment security,” he said.
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Authorities and market participants are now considering the creation of a specialised structure dedicated to hydrocarbon risk coverage.
According to local media reports, the proposed mechanism could help Senegalese insurers capture up to 13 billion CFA francs (around $21.3 million) in annual premiums linked to the oil and gas industry.
The initiative would build on earlier efforts to establish the Senegal Oil and Gas Risk Insurance Pool, a co-insurance arrangement designed to allow locally licensed insurers to jointly cover petroleum-sector risks.
The project, considered a pioneering initiative in Francophone Africa, faced delays because of disagreements within the domestic insurance industry.
The renewed push comes as Senegal’s hydrocarbon production accelerates.
The offshore Sangomar oil field began production in 2024 and produced 16.9 million barrels last year, exceeding initial targets, according to trade credit insurer Coface.
Meanwhile, the Grand Tortue Ahmeyim gas project, developed jointly with Mauritania, started production in early 2025.
As the sector expands, Senegalese authorities say increasing local participation in insurance and related financial services will be essential to maximising the economic impact of the country’s natural resources.
