African Petroleum rejects Gambian license expiry talks

Following press reports that the Gambian government ended talks with African Petroleum (AP) for the extension of exploration rights for two offshore blocks, the Oslo-listed oil company denied the claims. 

The licenses in question are A1 and A4 offshore The Gambia where African Petroleum holds a 100% operated working interest.

According to Reuters’ report on Tuesday, the country is in preliminary talks with new investors after it has ended talks with African Petroleum. The news agency also claimed that the oil company had been looking to extend the exploration period, which expired last September.

Responding to Reuters’ claims, African Petroleum said on Tuesday: “The board states categorically that the licenses have not been terminated in accordance with the terms of the licenses, nor have they expired.”

According to the company, the terms of the licenses state that the licenses remain active unless and until a termination procedure is enacted by the state. As no such termination procedure has been enacted by the state, African Petroleum reserved its legal rights over the licenses.

AP also emphasized it had invested over $64 million in the country under the licenses and it therefore remains committed to the exploration and development of the licensed areas.

Come Wednesday and another confirmation of the licenses termination came in the form of a statement to Reuters by the country’s oil minister, Fafa Sanyang. The news agency quoted the minister as saying: “That’s the truth. You already got the message about the licenses.” Sanyang was referring to comments made on Tuesday to Reuters by the oil ministry’s permanent secretary for petroleum, Mod K. Ceesay.

However, AP on Wednesday re-iterated its claims, stating that the comments made my the government officials were “wrong both in law and in fact.”

Jens Pace, African Petroleum CEO, said: “We are surprised and disappointed to read the comments from the Gambian officials regarding the status of our licenses in country. We have maintained dialogue with the officials and were in-country only recently with our potential partner to host discussions on the proposals we have put forward to progress the drilling of these licenses.”

Pace was referring to the company’s talks, revealed in April, with an unnamed firm looking to secure a 70% operated interest in the company’s SOSP production sharing contract (PSC) in Senegal and the A1 and A4 licenses.

Pace further added: “We reiterate that we reserve the legal rights to these licenses and state categorically that the licenses have not been terminated in accordance with the terms of the licences, nor have they expired. The licence agreements have dispute mechanism provisions which we fully intend to utilize if the Gambian authorities maintain this stance; however, our preferred route is to engage in more constructive dialogue in order to establish a way forward that is in the best interest of all stakeholders.”

The company has found a number of analogue leads and prospects in its acreage to that of the recent discoveries and appraisal wells drilled by Cairn Energy offshore Senegal, including the SNE field, the largest oil discovery of 2014.

AP estimates that the acreage contains net unrisked mean prospective oil resources at 3,079MMStb.

Offshore Energy Today Staff

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