BP has agreed to pay cash to The Gambia to avoid drilling an exploration well on Block A1.
The company has now given up on the block and The Gambia will start offering it to interested parties.
A statement from the Ministry of Petroleum and Energy said the deal with BP had been “settled out of court”. This solved BP’s “exceptional commitment to drill an exploration well”.
The government said BP would pay 1.5 billion dalasi ($ 29.3 million) to avoid drilling the well.
BP signed the permit in April 2019, committing to drill a well by the end of July 2021. It also had various 2D and 3D seismic processing commitments.
The company had planned to drill the well by the end of 2020. However, COVID-19 disrupted plans.
In July this year, BP told the Energy Ministry that it would not drill the well on the A1. The company said this was a result of its change in corporate strategy towards reducing carbon emissions, local newspaper Foroyaa reported.
The Gambia then thanked BP for their collaboration, saying they hoped to work with the company in the future. He also noted the support from the African Legal Support Facility and consultants: Addleshaw Goddard, DLA Pipers, Open Oil and Ric Weighman.
Eyes on Bambo
Minnow African Petroleum previously held blocks A1 and A4. The company merged with PetroNor in June 2019. The company had not been able to meet its licensing obligations, which led The Gambia to confiscate the block and award it to BP.
In September 2020, Petronor reached an agreement to settle its disputes with The Gambia. He waived any rights to A1 and signed a new 30-year lease on A4 under new conditions. She is looking for a partner to support the drilling of an exploration well on the A4, citing potential similarities with Senegal’s Sangomar.
The Australian FAR signed the Stena IceMAX to drill an exploration well off the Gambia during the last quarter of the year. The Bambo-1 well is near the border with Senegal, where the FAR participated in the discovery of Sangomar.