BP takes over disputed offshore block in The Gambia

Oil major BP has struck an offshore exploration deal with the Gambian government in a disputed block previously held by African Petroleum Corporation.

The signing ceremony / Image source: GNPC
The signing ceremony / Image source: GNPC

The Ministry of Petroleum & Energy of The Gambia has this week announced the official licensing of Offshore Block A1 to BP.

“This license provides the necessary legal framework for the Exploration of the A1 acreage, the eventual development of fields (upon the discovery of hydrocarbons) and the ultimate production of Oil and/or Gas from Block A1,” the Ministry said earlier this week.

Announcing the deal via Twitter on Wednesday BP said:” BP expands growing acreage off West Africa by signing a deal for exploration rights in The Gambia.”

This was confirmed also via social media by State House of the Gambia and Gambia National Petroleum Corporation (GNPC) which quoted BP’s VP Africa New Ventures Jonathan Evans as saying: “BP is very excited to make its re-entry into The Gambia. We were here 30 years ago and now we are back.”

“This is about looking for oil and gas in the deep water where BP would be able to connect the government of the Gambia with our partners at GNPC to explore for oil and if it is successful to develop that oil in the future,” Evans was quoted as saying.

It could take a decade before any revenue comes in

According to the report, BP will first carry out an environmental impact assessment, followed by a two-year period of drilling, exploration, and development of the first well.

Per the State House of the Gambia Facebook post, BP’s Evans also called for cautious optimism, “emphasizing that the explorative stage is just the beginning and the results could go both ways despite the attractiveness of the zone. He added that it could actually take close to a decade before the country accrues any revenue from the venture.”

“It is very important for the viewers to understand that the money wouldn’t start flowing tomorrow. It is probably in ten years’ time before the revenues would start flowing in,” Evans was quoted as saying.

GNPC tweeted:”This monumental achievement represents one of the most important and most valuable agreements our country has signed since independence and has the realistic potential to positively transform our country and bring out significant transformative economic development.

“The journey to this historic event has been two years in the making through the competitive bidding process which started with more than 22 interested International Oil Companies (IOCs).

“Oil exploration has been ongoing in The Gambia since 1960s. In 2016 discovery of Oil on the SNE acreage in Offshore Senegal due to its proximity to Gambian Offshore blocks greatly de-risked the area and brought in renewed interest.”

Disputed area

It is worth noting that the Block A1 along with the Block A4 was previously held by Oslo-listed African Petroleum. The Gambian government in 2017 said it had ended talks with the company for the extension of exploration rights over these two blocks, stripping the company of its rights in the blocks.

Commenting on BP signing the agreement for the A1 Block, African Petroleum this week said:” African Petroleum notes recent media articles stating that BP Plc has signed an agreement with the Gambian government in relation to Block A1 in The Gambia. The Company continues to reserve its rights in relation to the A1 license and will continue with its efforts to protect its interest in the A1 license through the ongoing ICSID arbitration process.”

Apart from The Gambia, African Petroleum is also in a dispute over its (former) blocks in Senegal. Senegal in 2017 awarded operatorship over Rufisque Offshore Profond block to the French oil major Total (later joined by Petronas). The block was previously held by African Petroleum, and the company last year initiated the arbitration process over its rights there.

Offshore Energy Today Staff


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