Senegal Signs $3.5bn Refinery Deal With Turkey’s Yamata to Process Local Crude, Target West African Fuel Market

Senegal’s state refiner, the Société Africaine de Raffinage (SAR), has signed a memorandum of understanding with Turkish company Yamata to build a second oil refinery and upgrade its existing plant, in a push to process more of its newly produced crude domestically and sell fuel across West Africa. The agreement was signed in New York on 23 September 2026 during the United Nations General Assembly, with President Bassirou Diomaye Faye in attendance.

The proposed new refinery is designed to process four million tonnes of crude per year and is estimated to cost between $2 billion and $3 billion. A separate upgrade of SAR’s existing refinery at Mbao, near Dakar, carries an estimated cost of $300 million to $500 million. Combined, the two components put the programme at between $2.3 billion and $3.5 billion. These are projected costs, not an announcement that Yamata has already raised or invested that amount.

Under the arrangement described by Senegal’s presidency, Yamata would handle engineering, procurement and construction, and would seek financing from its partners without a sovereign guarantee from Senegal. That detail matters for a country working to restore debt sustainability. On 1 September, the International Monetary Fund announced a staff-level agreement on a proposed $2.2 billion programme for Senegal, which still requires further approvals and financing assurances.

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The project is intended to handle crude from Senegal’s offshore Sangomar field as well as other grades, supplying the domestic market first and potentially leaving fuel for neighbouring countries. A refinery capable of processing four million tonnes annually would be substantially larger than the existing Mbao operation, which processes about 180 tonnes of crude an hour and covers roughly half of national hydrocarbon needs. The new plant would make Senegal a fuel supplier to West Africa rather than an importer of refined products, according to the presidency. The project also includes proposed petrochemical activity, and SAR forecasts more than 15,000 direct jobs during construction, a projection that depends on the project proceeding.

Senegal began producing oil in June 2024 when Woodside Energy started output from Sangomar. Sangomar crude first reached SAR’s existing refinery in February 2025, but the country still relies on imports to meet part of its fuel needs. The New York signing advances discussions that were already under way. Senegal’s prime minister’s office identified Yamata in August 2025 as a prospective financing and implementation partner for the SAR 2.0 project. The newly signed memorandum gives those talks a formal framework, but detailed engineering and the financing structure still need to be finalised before construction can begin. No start date for the new refinery was established in the announcement.

The deal follows the broader pattern of Senegal’s push to assert greater control over its natural resources. The country has been renegotiating mining agreements and seeking to retain more value from its oil and gas sector, while managing a debt burden that was inflated by borrowing discovered under the previous administration. The refinery project, if financed and built, would mark a significant step towards industrialisation and energy sovereignty. But for now, it remains a memorandum of understanding, and the hard work of securing funding, completing engineering studies and beginning construction is still ahead.

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