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Independent oil and gas company African Petroleum (AP) is waiting for the appointment of the arbitrators in arbitration proceedings against the Gambian government related to the company’s interest in A1 and A4 offshore licenses.
In the case against the government of Gambia, African Petroleum’s subsidiaries African Petroleum Gambia Limited and APCL Gambia B.V in October 2017 lodged requests for arbitration 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.
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.
African Petroleum informed on Thursday, March 8 that the ICSID has now registered these requests and allocated them their case numbers.
The parties to the arbitration proceedings and ICSID are currently working towards the confirmation of appointment of the arbitrators to the tribunals for each arbitration case.
The company said it continues to remain open to engaging in constructive dialogue with the Gambian authorities with a view to establishing a satisfactory solution that is in the interests of all parties.
In Senegal, African Petroleum has a 90% interest in SOSP & ROP production sharing contracts (PSCs).
The term of the first renewal phase of the Senegal Offshore Sud Profond (SOSP) PSC expired on December 15, 2017.
Prior to the expiry of the current phase, the company lodged an application to enter into the second renewal phase of the contract, and also 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. The company has yet to receive any response to the PSC application.
African Petroleum noted recent media reports that Total has started a seismic acquisition on the ROP block. The company continues to reserve its rights on the Rufisque Offshore Profond (ROP) PSC.
The company has engaged the services of a Paris based law firm to provide legal advice on the company’s contractual rights under the SOSP and ROP PSCs. In January 2018, formal notices of dispute were lodged with the Senegalese authorities in respect of the SOSP and ROP PSCs and, in accordance with the terms of the PSCs, the parties have three months to resolve the disputes.
In the event that the parties are unable to resolve the disputes then there are arbitration provisions within the PSCs that can be utilized by the company in order to protect its interests.
As reported earlier this week by Offshore Energy Today, Ophir Energy has decided to exit the block CI‐513 off the Ivory Coast. Ophir is the operator of the block and African Petroleum is its partner.
African Petroleum said on Thursday that the two have completed the post‐well analysis work following the drilling of the Ayamé‐1X exploration well in May 2017 and it has been concluded that the remaining prospectivity of the CI‐513 block does not represent an attractive investment opportunity that would justify entering the next phase of the PSC and the work program and financial commitment.
When it comes to the CI‐509 block where AP has a 90% interest, the current phase of the CI‐509 PSC ended in March 2016; however, the Ivorian authorities allowed the company additional time to find a new partner to join the PSC. Unfortunately, the company has been unable to find a new partner and has now withdrawn from the CI‐509 PSC.
African Petroleum’s subsidiaries European Hydrocarbon Limited and African Petroleum Sierra Leone Limited in December 2017 entered into the second extension periods of the SL‐03‐17 and SL‐4A‐17 licenses respectively and modified the work programs for both licenses during these periods.
In December 2017, ERC Equipoise Ltd (ERCE) prepared an updated assessment of prospective oil resources attributable to the company’s Sierra Leone licenses. The ERCE Letter of prospective resources includes six undrilled prospects and estimates the net unrisked prospective oil resources at 2.53 billion barrels.
The company is utilizing State owned well and seismic data, together with existing seismic data, to further de‐risk the licenses prior to deciding to commit to the drilling of an exploration well on each license.
The ultra‐deep water (3,000 – 3,500m) setting of these licenses has in the past been a deterrent to attracting industry interest. However, the Company has experienced increased industry interest in this acreage due to technology improvements and cost reductions in ultra‐deep water drilling together with the materiality of the prospects identified by the Company on the SL‐03‐17 and SL‐4A‐17 licenses. As such, the Company is engaging in preliminary discussions with interested industry players with a view to potentially partnering on future activities relating to these licenses.