Woodside Energy Group Ltd (ASX: WDS) shares are getting some support on Friday, following another lift in global oil prices.

Brent crude oil gained 1.5% overnight to trade for US$90.65 per barrel. That sees the oil price up 19.5% so far in 2024.

In late morning trade, shares in the S&P/ASX 200 Index (ASX: XJO) energy stock are up 0.7%, trading for $30.75 apiece. That compares favourably to the 0.5% loss posted by the ASX 200 at this same time.

So, with oil prices shooting higher, why could the dividends from Woodside shares be facing a potential hit?

Woodside is a popular stock among ASX passive income investors for the outsized, fully franked dividends it has paid out in recent years.

The company's most recent final dividend of 91.7 cents per share was paid out to eligible investors yesterday.

Atop the interim dividend of $1.243, paid on 28 September, Woodside shares trade on a fully franked trailing yield of 7.1%.

However, trouble could be brewing for the future Woodside dividends following a major political shakeup in Senegal.

The African nation's newly elected president, Bassirou Diomaye Faye, is casting his eye on the "exploitation" of his country's national resources.

Faye said (quoted by Reuters):

The exploitation of our natural resources, which according to the constitution belong to the people, will receive particular attention from my government…

I will proceed with the disclosure of the effective ownership of extractive companies [and] with an audit of the mining, oil, and gas sector.

Woodside's Sangomar project, estimated to cost close to $8 billion, is located in offshore Senegal. The project is forecast to produce 100,000 barrels per day, with the first production still scheduled for 2024.

Woodside's share of the Sangomar project is 82%. Petrosen, Senegal's national oil company, owns the other 18%.

Woodside shareholders might take some solace from President Faye's reassurance that "investor rights will always be protected, as well as the interests of the state and the people". 

However, Citigroup energy analyst James Byrne believes trouble could be brewing.

He notes that the Senegal government's 'take' under production sharing contracts is currently around 30%. But he believes that could well go up.

According to Bryne (quoted by The Australian Financial Review):

Oftentimes frontier markets that undertake this sort of a change after an election see the original rhetoric watered down after industry consultation, but ultimately governments secure a bigger share of the pie.

And Bryne warns that could see the dividends delivered from Woodside shares fall off a "cliff" while the company waits for its mammoth Western Australia Scarborough gas project to come online in 2026.

Bryne said:

Our view is that there is a dividend 'cliff' coming as Woodside's earnings decline into 2026 before Scarborough has started and ramped up.

Supposing the government take was 10 percentage points higher at around 40% then the dividend could be up to 20% lower given Sangomar's contribution in that particular 'trough' year for earnings.

So it may exacerbate the dividend cliff that we are already forecasting.

Commenting on the political development in Senegal, a Woodside spokeswoman said, "Our experience has shown that the most successful jurisdictions have been those that work in partnership with industry, respect contract sanctity, and create investment certainty."

She added, "Woodside looks forward to continuing to work with the government of Senegal to help meet their energy goals."

Less than six weeks ago, on 13 February, Woodside announced that its Floating Production Storage and Offloading (FPSO) facility had safely arrived offshore of Senegal.

The company said it was a "significant step toward achieving first production from the Sangomar field," which would bode well for the outlook for Woodside shares and upcoming dividends.

CEO Meg O'Neill said at the time:

The FPSO arrival brings us closer to first production which is targeted for mid-2024. We are proud to be Senegal's first offshore oil project and firmly believe that this project will prove to be important to Senegal's future development and prosperity…

The completion of this phase of the project is only possible through strong partnerships with the Senegalese government, joint venture participant Petrosen, and our contracting partners.

Woodside shares are down 2% in 2024, though that doesn't include the latest final dividend payout.