Senegal Restructures Extractive Sector: Legal Framework & Investor Protections (2026)
In March 2026, the Senegalese government announced a sweeping review of contracts and licenses in its extractive sector. Prime Minister Ousmane Sonko announced the termination of petroleum concessions over several offshore blocks, the recovery of assets held by Industries Chimiques du Sénégal (ICS) — a major phosphate producer — and the withdrawal of over 70 mining licenses, including 14 gold permits, from operators deemed to have failed to honour their contractual obligations. The government also cited fiscal losses estimated at approximately 1,076 billion CFA francs ($1.88 billion), attributable to non-payment of taxes and duties and the granting of exemptions allegedly without legal basis.
For all operators — local and foreign — currently active in Senegal’s extractive sector, as well as for those directly affected by these measures, it is essential to assess the legal tools available to them.
Below is a summary of the applicable legal framework and the main protection mechanisms available.
Senegal’s Petroleum Code
The hydrocarbons sector is governed by Petroleum Code No. 2019-03 of 24 January 2019, which replaced the 1998 framework. The 2019 Code reaffirms that all petroleum resources in Senegal are the property of the Senegalese people and that the State exercises sovereign rights over all petroleum operations. It governs the award, execution, and termination of petroleum contracts, including production sharing agreements and service contracts.
Importantly, the 2019 Code introduced a stabilisation clause with defined limits: it cannot be invoked where regulatory changes concern safety, environmental protection, or operational control, unless the modification is discriminatory or contrary to international practice. The Code also introduced mandatory arbitration and mediation provisions as the primary dispute resolution mechanisms.
Contracts signed under the 1998 Code remain subject to that prior legal regime, unless the parties have agreed to migrate to the 2019 framework. This distinction is critical for assessing the legal rights of operators whose concessions predate the current Code.
Senegal’s Mining Code
The mining sector is governed by Mining Code No. 2016-32 of 8 November 2016, implemented by Decree No. 2017-459. The 2016 Code sets out the conditions for the award, renewal, transfer, and revocation of mining titles. It provides express legal grounds upon which the State may revoke a mining permit, including: inactivity or suspension of operations without justification; non-payment of taxes, royalties, or other financial obligations; failure to commence operations within statutory deadlines; and serious breaches of health, safety, or environmental rules.
The Code also introduced stronger transparency and reporting obligations for permit holders, as well as mandatory contributions to local development funds. Mining contracts in Senegal typically include stabilisation clauses and, depending on their terms, may provide for international arbitration to resolve disputes with the State.
Senegal’s Investment Code
Law No. 2025-16 of September 27, 2025, establishing the new Senegalese Investment Code, replaces the regulatory framework of 2004 and modernizes the legal environment regarding private investments. The Code maintains the fundamental protections of investors, notably guarantees against nationalization or expropriation, the freedom to transfer capital and profits, as well as equality of treatment between national and foreign investors. Any measure equivalent to expropriation remains subject to fair and prior compensation. Foreign investors are guaranteed the right to freely transfer the income, dividends, and proceeds of their activities to the country of their choice, in accordance with WAEMU regulations.
Disputes arising from the interpretation or application of the Code that cannot be resolved amicably are brought before the competent Senegalese courts, while disputes involving foreign investors may be submitted to conciliation and arbitration procedures under applicable bilateral investment treaties concluded between Senegal and the investor’s State of origin. The new Code also redefines and clarifies the investor protection regime, strengthens the role of Agence pour la Promotion des Investissements (APIX) in managing grievances and preventing conflicts between investors and public authorities, and introduces enhanced non-fiscal incentives for registered investors.
Senegal is also a member of the OHADA (Organisation pour l’Harmonisation en Afrique du Droit des Affaires) framework, which provides access to arbitration and mediation through the CCJA (Cour Commune de Justice et d’Arbitrage).
Bilateral Investment Treaties (BITs)
Senegal has concluded 29 BITs with a wide range of countries. Of these, 18 are currently in force. Key treaty partners include:
- France (BIT signed 2007, in force since 2010)
- United States (BIT signed 1983, in force since 1990)
- United Kingdom (BIT signed 1980, in force since 1984)
- Switzerland (BIT signed 1962, in force since 1964)
- Canada (BIT signed 2014, in force since 2016)
- India (BIT signed 2008, in force since 2009)
- Turkey (BIT signed 2010, in force since 2012)
- South Africa (BIT signed 1998, in force since 2010)
- Qatar (BIT signed 1998, in force since 2009)
- Netherlands (BIT signed 1979, in force since 1981)
- Mauritius (BIT signed 2002, in force since 2009)
These treaties typically provide foreign investors with protections against unlawful expropriation without fair compensation, unfair or inequitable treatment, discriminatory measures, and denial of justice. They also commonly allow disputes to be referred to international arbitration — including before ICSID — independently of domestic court proceedings.
Multilateral Investment Frameworks
Beyond BITs, several multilateral instruments are relevant:
- ICSID Convention: Senegal ratified the ICSID Convention, providing access to investor-State arbitration under the World Bank framework. An ICSID arbitration is already underway: Woodside Energy filed a claim against Senegal’s Ministry of Petroleum and Energy in 2025 over a contested tax adjustment relating to the Sangomar offshore field.
- OIC Investment Agreement: Senegal is a member of the Organisation of Islamic Cooperation Investment Agreement (1981), which provides protections for investors from OIC member states, including against unlawful expropriation and discriminatory treatment.
- ECOWAS frameworks: As a member of ECOWAS, Senegal is bound by the ECOWAS Common Investment Code (ECOWIC, 2019) and the ECOWAS Supplementary Act on Investments (2008), which provide regional investment protections and dispute resolution mechanisms.
- New York Convention: Senegal is a party to the 1958 New York Convention on the Recognition and Enforcement of Foreign Arbitral Awards, meaning that arbitral awards rendered against Senegal can in principle be enforced in any of the 172 contracting states.
Contractual Protections
Independent of applicable treaty frameworks, the contracts themselves — whether petroleum contracts, mining conventions, or investment agreements signed with the State — may contain key protections, including:
- Stabilisation clauses, freezing the legal and fiscal regime applicable to the project at the time of signature;
- Neutral and delocalized arbitration clauses, providing for dispute resolution before ICSID, ICC, or other international arbitral institutions;
- Renunciation of sovereign immunity clauses, allowing enforcement of arbitral awards against State assets;
- Obligation of the State to assist the investor in obtaining and maintaining required authorizations.
The specific protections available will depend on the terms of each individual contract, and a careful review of the contract documentation is essential.
Key Considerations for All Parties
The measures announced by the Senegalese government in March 2026 raise complex legal questions that are relevant to all parties involved — both the State and the operators concerned.
For the State, the legal sustainability of each measure will depend on whether it is grounded in documented, case-specific breach of applicable contractual or statutory obligations, and whether the procedural requirements set out in the Mining Code and Petroleum Code have been followed. Where measures are contested before international arbitral tribunals, the evidentiary record — including audit findings, notices of breach, and administrative decisions — will be central to the outcome.
For operators — whether local or foreign — the protections available will vary significantly depending on the legal basis of their title, the terms of their individual contracts, the nationality of the ultimate investor, and the applicable treaty framework. Not all affected parties will be in the same legal position, and a careful review of the specific facts and documentation is essential before any course of action is considered.
Both the State and operators active in Senegal’s extractive sector would benefit from seeking specialized legal advice at an early stage — whether to assess the strength of a claim, evaluate the basis for a contested measure, or explore the conditions under which a negotiated resolution may be achievable.
Aboubacar Fall (AF Legal) / Baptiste Rigaudeau (Lead up)
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