African Petroleum has vowed to exercise its rights over exploration licenses in The Gambia following the axing of talks to have them extended.
African Petroleum chief executive said it will use dispute mechanisms to maintain rights to its licenses if the government maintains its current stance.
“The License agreements have dispute mechanism provisions, which we fully intend to utilize if the Gambian authorities maintain this stance,” Chief Executive Jens Pace said.
“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 said it has already spent more than $60 million dollars (D2.4 billion dalasis) in the country but couldn’t start exploration bore initial licenses expired.
Licenses state that the licenses remain active unless and until a termination procedure is enacted by the Gambia, according to African Petroleum.
“No such termination procedure has been enacted by the State and African Petroleum, therefore, reserves its legal rights over the licenses,” the company’s spokesperson said.
The UK-based operator says it is ‘surprised and disappointed’ by reports on Gambia blocks as it shares plunged.
Shares of the Oslo-listed company were down around 39 percent on Wednesday in the Norwegian capital following a report from Reuters that talks for extensions to exploration rights were nixed.
“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 licenses, nor have they expired,” said the spokesperson.
The Gambia is already facing multiple lawsuits over wrongful termination of contracts and hostile takeover of several companies.
It has nearly $26 million dollars (D1.04 billion dalasis) of legal liabilities in court awarded damages and has a pro-bono business savvy attorney to review past, existing and future contracts.
Gambia’s Energy and Oil Ministry said African Petroleum has not fulfilled its commitments and as a result are looking for new bidders.
Senegal, Gambia’s neighbor also accused African Petroleum of not fulfilling its commitments.
African Petroleum maintains that it still has rights over two oil blocks in Senegal, north of its Gambian blocks.
Following African Petroleum’s woes, Gambia’s government agreed to New York-listed Erin Energy Corporation grant of an 80 percent interest in its A2 and A5 blocks to be transferred to Australia’s FAR Corporation.