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Gambia Awards Disputed Offshore Oil Block To BP

The small West African country Gambia has awarded BP the exploration rights to drill for oil and gas in an offshore block which another company claims it has the rights to explore.

Gambia and BP signed on Tuesday a petroleum exploration contract, giving the UK supermajor “the legal rights” to explore for oil and gas potential in block A1 offshore Gambia, the office of the Gambian president Adama Barrow said in a statement posted on Facebook.  

“This is about looking for oil and gas in the deep water where BP would be able to connect the government of the Gambia with our partners at GNPC to explore for oil and if it is successful to develop that oil in the future,” Jonathan Evans, V.P. Africa New Ventures at BP, said, as quoted by the Gambian presidential office.

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However, another producer, African Petroleum Corporation, claims that it still holds the rights to the block that was just awarded to BP. Back in 2017, Gambia stripped African Petroleum of its license for the A1 block, saying it had expired while the company hadn’t met contractual obligations. African Petroleum has launched arbitration at the International Centre for Settlement of Investment Disputes (ICSID).

In a statement on Wednesday, African Petroleum said that it “continues to reserve its rights in relation to the A1 licence and will continue with its efforts to protect its interest in the A1 licence through the ongoing ICSID arbitration process.”

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BP, for its part, intends to begin exploring offshore Gambia—which borders Senegal where large gas finds have been recently made—with an environmental impact assessment, followed by a two-year period of drilling, exploration, and development of the first well.

According to BP’s Evans, as quoted by Gambia’s president’s office, it could take close to a decade for Gambia to receive revenues, if exploration efforts are successful.

By Tsvetana Paraskova for Oilprice.com

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