The Gambia government has signed a 30-year oil exploration agreement with PetroNor for two offshore blocks  — Block A1 and A4 — as part of an out of court settlement. 

The new deal which seems to be favourable to PetroNor at the expense of The Gambia came after a three year legal battle between the company and the Gambia government at the International Centre for Settlement of Investment Disputes (ICSID) in the United Kingdom. 

The Gambia government was sued in 2017 by African Petroleum — which was acquired in August 2019 by PetroNor — over its licenses offshore The Gambia. 

PetroNor, an Oslo-listed independent oil and gas exploration company with interests in sub-Saharan Africa, announced that the company has reached a mutual agreement with the The Gambia government to settle its arbitration related to the A1 and A4 licenses. 

Under the terms of the settlement PetroNor will regain the A4 license and sign a 30-year lease and relinquish any claims related to A1 licence that has been contracted to BP. 

“These are very favourable terms to the government of the Gambia from financial, legal and technical standpoint and we are pleased to have reached a mutually beneficial settlement and the positive implication is lifting to cloud of uncertainty that hung over the process as a result of the arbitration,” said Justice minister Dawda Jallow at the signing ceremony at Petroleum House in Brusubi. 

“On the execution of the A4 License, PN (PetroNor) has 12 months to fulfil the conditions precedent for the License to be effective. One of the conditions precedent include the requirement for PN to provide notice of the government of its intention to continue the License. 

“If PN does not fulfil the conditions precedent within the twelve months after the execution of the License, the License terminates and PN will relinquish all claims,”Justice minister Jallow added. 

Eyas Alhomouz, PetroNor chairman, said: “This is undoubtedly a good outcome for all parties as it removes a lot of uncertainty and potential further cost exposure to what was a highly complex situation. 

“The outcome is certainly one that we believe is in the best interest of the company and its shareholders, and one that we have been driving hard to achieve for over a year.”

Mr Alhomouz added: “This settlement results in PetroNor regaining 100% interests in a highly prospective Block in one of the most exciting hydrocarbon basins in the world. 

“The terms of the new license are significantly more attractive and will enhance not only the value of the license but also its attractiveness to potential partners.”

By Momodou Musa Touray and Adama Makasuba