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APCL readies arbitration over Gambia blocks

African Petroleum says it is preparing to finally take action over offshore tracts amid silence from Banjul

African Petroleum Corporation (APCL) appears to have lost patience with the government of President Adama Barrow in Gambia as the UK-based explorer prepares to take legal action to protect what it sees as its position in two offshore blocks.

The Oslo-listed player, which continues to lay claim to blocks A1 and A4 off the West African country, said on Monday that it is "preparing to formally commence arbitration", with respect to the prolonged standoff with the new Banjul administration.

The apparent decision to head for arbitration comes amid continued share-price erosion and media reports out of the region quoting government officials as saying APCL no longer has any claim to the two blocks, at least one of which has been opened up for bidding from oil companies.

APCL has reacted to those reports by asserting that any claims its licences have expired or have been revoked is incorrect, repeatedly stating that it has had no formal notification from Gambian authorities that the blocks are no longer the company's.

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On Monday it went further to say that it has still had no feedback from the Banjul administration, "formal or otherwise ... despite its best efforts to engage in dialogue with the relevant authorities".

APCL has previously made clear that it could go to arbitration to resolve the impasse. Any process would be under the auspices of the Washington DC-based International Center for Settlement of Investment Disputes, it has previously said, although the action could take place in any one of a number jurisdictions.

Chief executive Jens Pace said on Monday: "It is a matter of regret that it has come to this; however, we are confident in our legal position and have made great efforts to proactively engage in sensible dialogue with the relevant authorities.

"Previous assurances that we would receive feedback during the month of August do not seem to have been followed up.

"We now believe that in order to protect our historical investment, we have no choice but to take this case to arbitration."

Pace offered a potential olive branch, however, adding: "We remain open to progressive dialogue and sensible resolutions with the Gambian authorities but must proactively seek to protect our rights through this process."

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APCL's share price has fallen almost every day in recent days, with few exceptions. It was already down more than 6% on Monday before the company's announcement, after which it started to head further south.

Shares in the company had already nosedived in mid-July after a series of reports claimed the Gambian government was no longer in talks with it over its 100% interest in the two offshore blocks. APCL attempted to steady the boat by reasserting its right to the blocks, for which no termination notice had been sent or received. It also sought out meetings with Barrow's office and that of Oil Minister Fafa Sanyang.

APCL had a mystery farm-in partner waiting in the wings to take a 70% stake in and operatorship of both blocks A1 and A4, the same partner was to take over the SOSP licence off Senegal with 70% before the exclusivity period was dropped in July.