Gambia’s A1 Block on the market following BP exit

The Gambia’s A1 offshore block is once again free for licensing only days after BP agreed to a $29.3 million settlement for failing to meet its drilling obligations in the block.

BP was awarded the A1 offshore block two years ago. At the time, BP said it would first carry out an environmental impact assessment, followed by two years of drilling, exploration, and development of the first well.

The block was a disputed area as Block A1, along with Block A4, was previously held by 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.

Since the July 2019 effective date, BP had been performing the necessary prerequisite tasks and obligations in view of drilling an exploration well. In particular, BP acquired and reprocessed 2D and 3D data and conducted an environmental impact assessment.

However, the commitment to drill an exploration well remained outstanding. In early 2020, BP suspended plans to drill a well by the end of the year due to Covid-19.

In July 2020, the oil major informed the Ministry that it would not be able to drill a well in the A1 Block due to a change in its corporate strategy towards low carbon energy.

As BP did not drill the well in Gambia’s offshore A1 block, last week it agreed to settle a $29.3 million outstanding commitment.

Days after the oil major settled the commitment, the Gambian Ministry of Petroleum and Energy said that the ‘A1 Block will revert to government free of all encumbrances’ and that it would be returned ‘on the market for licensing’. 

“The Government wishes to seize this opportunity to thank BP for the collaboration in amicably settling the matter and wish them good luck in their new strategy focus, hoping to work with them in the future in some other ways“, the Ministry said.