Senegal has signed a preliminary agreement with Turkish engineering and construction company Yamata for a second oil refinery and the modernisation of its existing Société Africaine de Raffinage facility in Mbao, as the country seeks to process more of its newly produced crude domestically and emerge as a supplier of refined petroleum products across West Africa, Business Insider Africa and CNBC Africa reports. Signed in New York on September 23 on the sidelines of the 81st United Nations General Assembly, the agreement provides for a new refinery with annual processing capacity of four million tonnes, designed to handle crude from the Sangomar field alongside other grades. The new facility is estimated to cost between $2 billion and $3 billion, while upgrading the Mbao refinery is expected to require a further $300 million to $500 million.
Under the agreement, Yamata will undertake engineering, procurement and construction while arranging financing through its financial partners without a sovereign guarantee from the Senegalese government. The partnership now moves into detailed engineering studies, described by Senegalese authorities as the final stage before construction. The existing Mbao refinery currently processes about 1.5 million tonnes of crude annually, leaving Senegal dependent on imported refined fuels despite becoming an oil producer following the start of commercial production at Sangomar in 2024. The proposed expansion is therefore designed to close the gap between domestic crude production and local fuel demand while creating additional refining and petrochemical capacity.
If completed, the project could significantly change Senegal’s position in the regional energy market by allowing the country to move from importing much of its refined petroleum to potentially exporting surplus fuel to neighbouring West African markets. Senegalese authorities also expect the wider development to support petrochemical industries, local manufacturing and more than 15,000 direct jobs during construction, although these remain projections dependent on financing and project execution. The investment forms part of Dakar’s broader SAR 2.0 strategy to capture more value from its growing oil production, with the government positioning domestic refining as a foundation for energy security, industrialisation and increased participation in the West African petroleum market.
