Senegal is advancing plans to build a second oil refinery under a multi-billion-dollar expansion of its state-owned refining company, Société Africaine de Raffinage (SAR), in a move designed to strengthen domestic oil processing and reduce reliance on imported petroleum products. The project, known as SAR 2.0, is projected to add an additional 4 million tonnes of annual refining capacity, positioning Senegal as a future refining hub for West Africa and marking a new phase in the region’s push for energy sovereignty.
The proposed facility, estimated to cost between US$2 billion and US$5 billion, will complement Senegal’s existing refinery in Mbao, near Dakar, West Africa’s oldest, built in 1961. That plant currently handles about 1.5 million tonnes of crude oil per year, primarily imported feedstock. With the expansion, total national refining output could increase to over 5.5 million tonnes annually by the end of the decade, substantially narrowing the import gap for refined fuels that still account for a large portion of Senegal’s trade deficit. According to SAR Chief Executive Officer Mamadou Abib Diop, production at the new refinery is expected to commence in 2029, aligning with the country’s broader plan to industrialize its emerging hydrocarbons sector.
The expansion coincides with Senegal’s transition into an oil-producing nation. In June 2024, the country began extracting crude from the offshore Sangomar field, its first commercial oil production, followed by local refining of the inaugural barrels in early 2025. That milestone marked a symbolic pivot from decades of fuel import dependence to the first steps toward domestic value addition. But it also introduced new policy questions about how to balance economic growth with environmental responsibility in an era when global climate commitments are tightening.
SAR 2.0 is being developed through a protocol agreement between the government of Senegal and Sedin Engineering, a subsidiary of China National Engineering, signed during the China–Africa Summit in 2024. The partnership signals the continued influence of Chinese state-linked companies in Africa’s energy infrastructure. However, Senegalese officials have emphasized that financing discussions are also ongoing with investors from Turkey and South Korea, an indication that Dakar is diversifying its sources of capital and technical expertise to avoid overreliance on any single partner.
The rationale for expanding refining capacity is both economic and strategic. Senegal spends hundreds of millions of dollars annually importing refined petroleum products, from gasoline and diesel to jet fuel. With domestic crude output expected to rise as new offshore fields mature, refining locally could stabilize energy prices, generate skilled employment, and improve balance-of-payments resilience. It also positions Senegal to export refined products to landlocked neighbors such as Mali, Burkina Faso, and Niger, which depend heavily on imports through coastal states.
Still, the timing and scale of the investment invite scrutiny. Globally, the energy transition is accelerating, and many advanced economies are moving to reduce fossil fuel consumption. The International Energy Agency projects that global oil demand could peak before 2030, just as Senegal’s new refinery comes online. For African producers, this creates a strategic dilemma: invest now to capture short-term economic benefits or pivot early to renewable energy infrastructure. Dakar’s approach, officials argue, is pragmatic, using oil revenues to fund long-term diversification into cleaner energy systems while meeting immediate national development needs.
From a regional perspective, the refinery expansion aligns with the Economic Community of West African States (ECOWAS) objective of increasing intra-African energy trade and local value addition. West Africa currently imports around 70% of its refined petroleum, despite hosting several crude-producing nations. Nigeria’s 650,000-barrel-per-day Dangote Refinery, which began operations in 2024, is reshaping trade flows across the Gulf of Guinea. Senegal’s SAR 2.0 could provide complementary capacity for smaller economies further west and north, reducing logistical bottlenecks and fostering competition that lowers regional fuel costs.
For Senegal, however, infrastructure alone will not guarantee economic transformation. The country’s energy transition plan, Plan Sénégal Émergent, envisions scaling renewable generation to 30% of the national energy mix by 2030, even as oil and gas development proceeds. The government has pledged to invest in natural gas-to-power facilities to replace heavy fuel oil in electricity generation, a measure that could cut emissions intensity while freeing refined products for export. Critics caution, though, that large refinery projects risk locking the economy into carbon-intensive infrastructure without sufficient safeguards for environmental and social impacts.
The environmental stakes are not minor. Refinery operations generate air pollutants, greenhouse gases, and industrial effluent that must be managed through strict regulatory oversight. Civil society groups in Dakar have already urged the government to ensure that SAR 2.0 includes advanced emission control systems and transparent environmental impact assessments. They argue that Senegal’s emergence as a refining hub should not come at the cost of local air quality or ecosystem degradation along the coast.
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Still, the economic imperative remains compelling. Senegal’s GDP growth, projected at 8.2% in 2025 according to the African Development Bank, is driven by the hydrocarbons sector and public investment in infrastructure. Expanding refining capacity could anchor industrial supply chains—from petrochemicals and plastics to logistics and storage—while creating thousands of direct and indirect jobs. It also reinforces the government’s messaging that Africa can industrialize on its own terms, leveraging its resources to build competitive, self-sustaining economies.
SAR’s expansion is therefore both an industrial and symbolic step: a statement of intent that West Africa will process more of what it produces. Whether it becomes a model of sustainable industrialization or a case study in fossil dependency will depend on execution, how the project integrates climate standards, community engagement, and fiscal transparency into its design and operation.
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