African Petroleum starts arbitration over Gambian licenses dispute

Oslo-listed independent oil and gas company African Petroleum (AP) has started arbitration proceedings “to protect its interests” related to its licenses offshore The Gambia. 

According to its statement on Wednesday, the company’s subsidiaries, African Petroleum Gambia Limited and APCL Gambia B.V have lodged Requests for Arbitration (RFA) documents with the International Centre for the Settlement of Investment Disputes (ICSID) in order to protect its interests in the A1 and A4 licenses in The Gambia, and that these RFAs have been registered and allocated case numbers by ICSID.

AP started preparing for the launch of the arbitration process against the government of The Gambia in early September following the government’s failure to provide any feedback, formal or otherwise, regarding the company’s status over the two offshore licenses.

As a reminder, AP’s dispute with the Gambian authorities related to the A1 and A4 offshore licenses started in mid-2017 when the government said it had ended talks with the company for the extension of exploration rights over these two blocks. Prior to the alleged expiry and termination of licenses, AP had a 100 percent operated working interest in offshore licenses A1 and A4.

“Due to legal confidentiality considerations and commercial sensitivities associated with the arbitration process, the company intends to only provide material updates to shareholders as and when appropriate,” AP said in the statement.

‘Arbitration is necessary’

Commenting on the update, CEO Jens Pace, said: “As we have emphasized on numerous occasions, arbitration is certainly not our preferred route; however, we believe arbitration is necessary to protect our interests in these licences in which we have made significant investment over the years. Despite the formal commencement of this process, we reiterate that we remain wholly open to engaging in constructive dialogue with the Gambian authorities with a view to establishing a satisfactory solution that is in the interest of all parties.

“Our message to our shareholders at this time is that we fully appreciate the concerns and queries they might have around this process and we understand that they will be keen for regular updates in terms of timings and possible outcomes. We are; however, legally and commercially constrained by what we can disclose and therefore request their patience as we work through this sensitive, fluid and complex process. It is also important to emphasize that we would not be embarking on this process, nor would it have been formally registered with ICSID, if we did not feel that we had a valid claim supported by the legal counsel we have received on the matter to date.”

In related news, AP earlier this week lodged an application to enter into the second renewal phase at the Senegal Offshore Sud Profond (SOSP) production sharing contract (PSC) offshore Senegal. The company requested to exchange the outstanding well commitment in the current phase for a 3D seismic acquisition program, and to transfer this revised outstanding commitment to the second renewal phase.

Offshore Energy Today Staff