PREVIEW
Hotly-denied suggestions that officials were paid for awarding oil concessions are causing trouble for the President
Ever since BBC television's Panorama current affairs programme revealed apparent evidence that controversial British-based Australian/Romanian businessman Vasile Frank Timis made massive payments to President Macky Sall's brother Aliou Sall, the political scene in Senegal has been in turmoil. The programme alleged that Timis's Senegal company Petro-Tim's employment of Aliou Sall was likely to have influenced the award of the St. Louis Profond and Cayar Profond offshore oil blocks to Petro-Tim. They have now been sold off to BP and Kosmos Energy in a bonanza payday for Timis.
Although all the parties deny any wrongdoing, Africa Confidential can reveal an earlier finding by an official Senegalese investigation which queried Timis's relationships at the top level in Dakar but was suppressed.
In 2014, ex-President Abdoulaye Wade accused President Sall's brother of 'owning 30% of Senegal's oil' with Timis, and Africa Confidential then reported that the deal was under scrutiny by the United States Federal Bureau of Investigation (AC Vol 56 No 18, Timis under scrutiny). We also reported news of high-stakes negotiations by the US oil company Kosmos Energy and Britain's BP with Timis to gain control of the gas fields, which are now known to be vast and could well transform the Senegalese economy (AC Vol 58 No 7, Timis takes shine off boom & Vol 58 No 10, Majors push out the minnows).
Yet, any evidence was lacking until the BBC's Panorama revealed secret accounts detailing payments from Timis to Aliou Sall of $250,000 plus a salary of $25,000 a month. The BBC says that BP will pay Kosmos and Timis, in return for their 30% stake in the gas fields, up to $10 billion over 40 years.
All of the parties involved deny any wrongdoing. Aliou Sall says he is suing for libel, while Timis's lawyers in London, Schillings, have described the BBC's allegations as 'entirely false' and defended Timis's handling of an oil concession that 'now has the potential to generate many billions of dollars revenue for the people of Senegal and provide gas to generate power which can be supplied across the whole of West Africa, to the benefit of many millions more people'. President Sall was contacted but had not replied as Africa Confidential went to press.
The Senegalese public, primed by a drip of allegations and opposition claims about corruption in the oil sector, thinks differently, however, and the President is facing the most serious challenge to his credibility in either his first or second term of office, which only began in February.
A new group of opposition organisations called the Conference of Leaders called for the public prosecutor in Dakar to bring the allegations to Senegal's High Court, demanding a full investigation.
Earlier concerns
Africa Confidential has seen a 2012 report – secret until now – that President Sall commissioned to probe Timis's activities before he came to office. The report told the new President that Petro-Tim should never have been awarded the gas fields in the first place. The report by the Inspection Générale d'Etat (IGE) found that Petro-Tim did not even exist at the time it was allocated the concessions and recommended that its licence be cancelled.
Insiders believe that President Wade's energy minister and son Karim Wade made the original deals with Timis for exploring the offshore blocks, and that when Wade lost office, Timis had to make new deals with President Sall and his brother. This could help explain why the IGE report was never published. One of its chief findings was that Petro-Tim, a Cayman Islands company, was only incorporated two days after the concessions were granted.
The IGE report also warned that Petro-Tim clearly did not have the capital to fund the drilling programme it had signed up to. The report added that Petro-Tim paid $1.5 million in signing bonuses to Senegal's state oil company Petrosen, which Tullow, the UK-Irish oil firm also then in talks with the Senegalese government over the concessions, refused to pay.
Senegal's 1998 oil law was designed to attract investors into extensive exploration – no significant gas or oil discoveries had yet been made – and it prohibited the payment of signature bonuses. This would make the payments to Petrosen illegal. There was no investigation or prosecution.
Tullow has been held up to the Senegalese public as something of a villain by Sall's supporters. During the recent presidential election campaign, pro-Sall propagandists falsely accused Tullow of offering opposition presidential candidate Ousmane Sonko cash in exchange for oil concessions in the event of his election (AC Vol 60 No 4, Sall campaign 'fakes news'). After the BBC broadcast its revelations, defenders of the President accused Tullow of being behind the story, and of creating 'fake news'.
Brothers under fire
This is not the first time Aliou Sall's association with Timis has caused embarrassment for the presidency. After reports emerged in 2016 accusing Aliou Sall of taking payments from Timis, he resigned from Petro-Tim, but kept his job as mayor of the Dakar suburb of Guédiawaye.
Sall added that his brother had ratified Petro-Tim's concession 'as part of the continuity of the state' and that he was ready to respond to any commission of inquiry or international tribunal that requested it. Regarding allegations over a $25,000 a month salary he received for his role at PetroTim, Sall said: 'Like any worker, I have negotiated a firm contract, but my salary is not illegal or unusual in the oil and gas sector. Some of my colleagues were receiving much more than I was.'
Reports emerged in Dakar on Sunday suggesting that President Sall, who has so far remained tight-lipped about the BBC's allegations, is under pressure to remove his brother from the head of the state-run savings deposit bank he heads, the CDC, and relieve him of his mayoral duties.
President Sall's background as a geological engineer, and his time as special adviser for energy and mines to President Wade and as director-general of Petrosen, will make it difficult for him to shrug off renewed criticism over the initial deal signed with Petro-Tim and say he was not aware of the potential value of the deal.
Former opposition candidate Sonko, who wrote a book about the controversy surrounding Senegal's nascent energy boom in 2016, said: 'At the time, I hadn't got the information that the BBC has... We knew there was a conflict of interest, now we know what was behind it. Timis should never have existed in Senegalese oil.'
The allegations have prompted a flurry of comments from other members of the Dakar elite named in connection with the business, including millionaire architect and former presidential candidate Pierre Goudiaby Atépa, who introduced Timis to Aliou Sall in China when Sall was a diplomat there (AC Vol 59 No 23, A well-oiled machine). Speaking to local press from Paris, Atépa defended Aliou Sall, calling him an 'excellent commercial agent' and said that he had not received 'a cent' from Timis.
The high-profile nature of the Petro-Tim controversy in Dakar and its dominance of headlines throughout Sall's Presidency raise questions about the rigour of BP's compliance regime.
BP claims that it conducted 'extensive and appropriate due diligence' before deciding to do business with Kosmos and Timis.
BP said that the $9-12bn which the BBC said the major could pay Timis in royalties for the Senegal gas fields was 'exaggerated beyond the realm of reality', adding that any payments would come out of BP's share of the investment, and not at Senegal's expense.
US oil company Kosmos has been in the firing line for the methods it uses to gain access to lucrative assets in West Africa in the past. In 2010, Ghanaian and US authorities opened an investigation into how Texas-based Kosmos and its local partner EO secured control of the Jubilee oil field, Africa's biggest offshore oil project (AC Vol 50 No 21, Corruption claims and rows tarnish Accra's record). After five years, the investigations were dropped, with Kosmos and their partners claiming their innocence.
Kosmos said in a statement that it 'strongly refutes any implication that it acted improperly in the acquisition of interests in Senegal.' Regarding allegations that Kosmos made a cash loan to Timis, the US oil firm said that it entered into a credit line with Timis Corporation for the 'sole purpose of funding exploration costs'.
No money changed hands between Kosmos and Timis. They pro-rated costs in exchange for his 30% share in the operations. This is the holding which Timis used as collateral against an iron-ore off-take deal in Sierra Leone with trader Gerald Metals (AC Vol 57 No 24, Timis's seam of woe).
Timis the pioneer
Within African resources circles, Timis is widely known for his failed Sierra Leonean mining ventures African Minerals and Regal Petroleum. In 2009, Timis's Greece-focused oil exploration firm Regal Petroleum was fined £600,000 by the London Stock Exchange's junior market AIM for failing to inform investors that drilling results from its well revealed an absence of oil. Shareholders in Regal lost millions.
After the collapse of Regal, Timis built up his West African empire, with operations at one point in Liberia, Sierra Leone, Côte d'Ivoire, Senegal and Burkina Faso. After the collapse of African Minerals in 2014 and the stripping of the mining licence at Tambao in Burkina Faso, Timis focused his energies on his increasingly lucrative Senegal operations. Most recently Timis moved into the virtual mining space and made headlines in the UK for emerging as the largest shareholder of Bitcoin mining venture, Argo Blockchain.
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