African Petroleum Corp plans to go to court to resolve its dispute with Gambia, the Norwegian-listed company said after government stripped it of its rights to explore for oil in two offshore areas.
“It is a matter of regret that it has come to this; however, we are confident in our legal position,” Chief Executive Jens Pace said in a statement posted on the company’s website.
“We now believe that in order to protect our historical investment we have no choice but to take this case to arbitration.”
Licence area blocks A1 and A4 are thought to contain up to three billion barrels of oil and lie next to licences in neighbouring Senegal where big discoveries have been made.
Shares in African Petroleum fell on the news and closed down 8.84% at 1.65 crowns in Oslo.
Gambia’s presidency said late last month the licences for the two blocks expired and were now open for relicensing. Gambia also says the African Petroleum failed to meet its commitments, a charge it denies.
Pace held talks with President Adama Barrow, who replaced long-ruling dictator Yahya Jammeh in January, in an attempt to resolve the dispute, but no agreement was reached.
“We remain open to progressive dialogue and sensible resolutions with the Gambian authorities,” he said in the statement.