The Point (Banjul)

Gambia: Govt. Terminates Petroleum Exploration Licences

The Gambia government has terminated petroleum exploration, development and production licenses, for "failure to meet the licence obligations by the licensees", the presidency announced on Monday.

In a statement issued, the Office of the President in Banjul said the government's decision was in accordance with the provisions of the petroleum laws of The Gambia.

According to the statement, the terminated petroleum licenses are: Offshore Blocks A1 and A4 licensed to African Petroleum Gambia Limited and Buried Hill Gambia B.V. as partners; and, Onshore Block Lower River licensed to Oranto Petroleum Limited.

"These licences have been terminated with immediate effect. The Gambia government will not allow any institution to acquire licences only to keep them for speculation. In our bid to harness our natural resources for the benefit of Gambians, we are not going to deal with speculators," the presidency added.

It would be recalled that on Friday 13th February 2004, the President delivered a statement to the nation on oil exploration, announcing the results of a study that showed that there exists oil in The Gambia in very large quantities, especially in the study area, and that all the information was recorded on a compact disc.

"It is important that I speak to you today to lay to rest speculations that have engaged many of us, following my address to the nation on the occasion of the 2004 New Year. Some Gambians are aware of the fact that there has been a long history of oil exploration in The Gambia, beginning in 1956," Jammeh said then.

"In the earlier years of the exercise", he added, "none of the companies exploring for oil in our country carried their exploration work beyond the initial phase, except for Chevron, which drilled an unsuccessful offshore oil exploration well in 1979 called Jammah-1".

He further stated that, "under the auspices of the Canadian government and funding, Petro-Canada International carried out studies in the 1980s, and between 1999 and 2002 an oil and gas company also carried out study work and a seismic programme, whose results were very questionable, to say the least, as this government has always believed that oil not only exists in The Gambia, but exists in very large quantities. As a result, their application to extend their license was rejected by government."

According to President Jammeh, "we did not extend the latter's license agreement because of their failure as well to meet their work obligations under the license, and because of a request that the financial terms of their agreement with The Gambia should be changed. The changes requested would have resulted in The Gambia receiving very little benefit from any commercial oil development which, to be precise, is 5% of any commercial oil development. This was also unacceptable to government, to say the least."

Thereafter, Jammeh went on, the government contracted a Western company "to review all previous work done in The Gambia, and to advise us on whether our belief that The Gambia had a very good potential for oil was correct or not.

"After reviewing all the work that had been done previously, they were able to tell us that in their opinion the potential was very high, but that a large study and three-dimensional seismic programme, known in the industry as a 3D survey, should be undertaken to confirm our beliefs.

"Working with this Western company, we completed a thorough evaluation of the oil potential of 500 square kilometres out of 2,000 square kilometres of deep water and 3,000 kilometres of shallow water of our maritime or offshore territory."

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