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PetroNor eyes resolution of Africa acreage title row

CEO confirms out-of-court settlement being sought in legacy dispute on Gambia and Senegal acreage after African Petroleum takeover

PetroNor E&P is pursuing an out-of-court settlement to resolve a lingering arbitration dispute over title to deep-water exploration acreage off The Gambia and Senegal following its recent merger with African Petroleum, its chief executive has confirmed.

The International Court for the Settlement of Investment Disputes is currently considering earlier claims lodged by African Petroleum for title to blocks A1 and A4 off the North-West African country, as well as to the Rufisque Deep and the Senegal Offshore South Deep (SOSD) tracts off neighbouring Senegal.

The company had asked the arbitral authority to impose a moratorium on upstream activity while these cases were pending after Senegal earlier offered its blocks to French supermajor Total, which has also carried out exploration work on the SOSD tract, while The Gambia awarded A1 to BP earlier this year.

PetroNor chief executive Jens Pace, who formerly led African Petroleum prior to its takeover by the Oslo-listed player, indicated in a conference call on Tuesday that his company is seeking to bypass these arbitration proceedings.

“We have always preferred the idea that this can be resolved outside of the legal process, which is robust but takes a long time, to reach a satisfactory solution for all parties,” he said in response to a caller’s question on the issue.

“All of the management team has shown a huge commitment to this since the merger and hopefully that will bear fruit.”

He added “we are focused on creating this possibility” in relation to discussions outside the legal process but declined to give an estimated timeline for a resolution, citing confidentiality constraints.

PetroNor is looking to get its hands on a 90% working interest on the acreage off Senegal that is estimated to hold nearly 1.8 billion barrels in net prospective resources, as well as a 100% stake in the Senegal blocks with just over 3 billion barrels in estimated net volumes.

The company, a joint venture between Norway’s Nor Energy and Petromal, the oil and gas arm of Abu Dhabi’s state investment vehicle National Holding, acquired African Petroleum in an all-shares deal earlier this year to give it producing assets off Congo-Brazzaville.

PetroNor to take Aje driving seat

The newly merged entity named PetroNor E&P has now struck a deal to acquire Panoro Energy’s 12.2% stake in the Aje oil and gas field off Nigeria where it intends to take over technical operatorship under a pact with Lagos-based operator Yinka Folawiyo Petroleum (YFP) in order to further develop “significant” oil reserves as well as associated gas that is presently flared off.

Speaking on the call held in relation to the deal, Pace highlighted the fact that “asset management by the joint venture has previously been one of the reasons for failing to realise the potential of the field to date and we are confident our entry into the project will help to unlock that potential”.

He claimed exploitation of these additional oil and gas reserves would be “transformational” for the company by boosting its output to between 2500 and 3000 barrels of oil equivalent per day towards a production target of 30,000 boepd within the next few years.

The acquisition, which marks the company’s entry into Nigeria, “further diversifies our portfolio and provides another revenue-generating pillar for our business” he said, indicating its partnership with YFP could provide a stepping stone to further opportunities in the West African country.

He said the deal was “a step in the direction towards becoming a full-cycle pan-African operator” that vindicated its stated strategy to grow production and reserves by leveraging existing assets to capitalise on new ventures, combined with high-impact exploration, following the merger completed at the end of August.

Pace said the transaction “reflects a strong pipeline of opportunities that the company has been considering” to achieve its production goal, suggesting further such asset deals are on the cards.

“There are a number of other opportunities in Nigeria, West Africa and elsewhere that are presently under consideration and would represent a meaningful step in the direction of fulfilling that ambition,” he said, adding “there are a lot of potential opportunities in the pipeline”.

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