PetroNor Settles Gambia Dispute Out of Court
Norway's PetroNor has reached an out-of-court settlement with Gambia protecting its interests at one offshore licence while relinquishing its rights to another, it said on September 21.
The A1 and A4 licences off the West African state were previously 100%-held by Oslo-listed African Petroleum. The Gambian government annulled the licences in 2017, claiming that contractual obligations had not been met, but African Petroleum disputed this and launched arbitration proceedings in the US.
African Petroleum was bought by PetroNor last year.
Under its deal with the government, PetroNor has secured a 30-year lease to A4, but will give up rights to A1, which was awarded to BP last year. It will operate the new A4 licence under a petroleum exploration and production licence model, and will be able to use past costs at the site to reduce its tax base and enhance its commerciality.
PetroNor's chairman Eyas Al-Homoz said the settlement was good for all parties.
"The outcome is certainly one that we believe is in the best interest of the company and its shareholders, and one that we have been driving hard to achieve for over a year," he said.
The new licence terms are "significantly more attractive and will enhance not only the value of the licence but also its attractiveness to potential partners," he continued. "Importantly, we have a year to decide if we wish to proceed with the lease agreement, and we would expect to have seen drilling on the adjacent A1 licence during this timeframe, which will mean we are far better placed to make commercial and technical decisions regarding the next steps associated with our licence."
Previously a 2,500 km2 3D seismic survey was carried out at the A1 and A4 sites, identifying a number of analogue leads and prospects on trend with discoveries made by Cairn Energy off neighbouring Senegal.