Gambiaj.com – DAKAR, Senegal – Australia’s Woodside Energy (WDS.AX), the operator of Senegal’s Sangomar oil and gas field, has escalated its tax dispute with the West African nation by filing a complaint with the World Bank’s International Centre for Settlement of Investment Disputes (ICSID).

A spokesperson for the company confirmed the filing on Monday, May 30, naming Senegal’s Ministry of Petroleum and Energy as the respondent.

The complaint signals Woodside’s determination to protect its interests and significant investment in the Sangomar oil field, Senegal’s first offshore energy project. This move comes despite previous reports of progress in resolving outstanding tax issues between the two parties.

Woodside’s spokesperson stated that while progress had been made, “given the lack of resolution on certain matters, the company has filed a request for international arbitration.”

The company maintains that it has “acted in accordance with applicable regulations, the Sangomar Production Sharing Contract, and the Host Government Agreement, and there are no outstanding taxes payable.”

Background to the Dispute

This latest development follows a court action filed by Woodside in Senegal last August concerning a tax assessment. Senegalese media reported at the time that the country’s tax authorities were claiming approximately 41 billion CFA francs ($68.68 million) from the company.

While Woodside’s spokesperson did not confirm the exact amount, they acknowledged that the firm was disputing the tax assessment in the High Court of Dakar.

The Sangomar field, discovered about a decade ago and located approximately 100 km (62 miles) offshore south of Dakar, commenced oil production for the first time in June of last year. The field is expected to produce around 100,000 barrels per day.

Government’s Stance and Future Negotiations

Shortly after Sangomar began production, in July, Senegalese President Bassirou Diomaye Faye announced his government’s intention to renegotiate oil contracts to secure greater benefits for the nation’s natural resources.

Despite the ongoing dispute and the government’s push to review and potentially renegotiate oil and mining contracts, Woodside has been proceeding with preparations for the second phase of the Sangomar oil field. Negotiations regarding existing contracts are anticipated to begin between 2025 and 2026, following a 12- to 24-month assessment of production data from Phase 1.

With Reuters