African Petroleum is taking The Gambia to arbitration over the refusal by the West African authorities not to renew exploration rights to two oil blocks.
The Gambia is currently accepting bids from oil companies for A1 and A4 blocks, which are thought to have at least three billion barrels of crude oil.
“It is a matter of regret that it has come to this; however, we are confident in our legal position and have made great efforts to proactively engage in sensible dialogue with the relevant authorities,” said CEO Jen Pence.
“Previous assurances that we would receive feedback during the month of August do not seem to have been followed up. We now believe that in order to protect our historical investment, we have no choice but to take this case to arbitration.”
The London-based and Oslo-listed company said it remains open to progressive dialogue and sensible resolutions with the Gambian authorities and says it is using the courts to proactively seek to protect its rights.
It is the second time that African Petroleum is threatening to drag the Gambia to court. Gambian officials have declined to engage the company in talks and reiterated they licenses will not be renewed.
Gambia’s oil minister, Fafa Sanyang said African Petroleum has failed to meet its contractual obligations, a similar upshot it faced with Gambia’s neighbor, Senegal.
African Petroleum insists it maintains legal rights over the oil blocks. Its shares plunged some 40 percent in July after it emerged that The Gambia had ended talks to extend exploration rights for the two offshore areas.