FAR is an Australian oil exploration company that is currently operating in Senegal. In fact the two Blocks (2 and 5) are next to FAR's 2014 SNE-1 oil field one discovery considered the largest offshore oil discovery of the industry that year.
The Agreement between Erin and FAR, FAR will pay a purchase price of $ 5.18 and take over $ 8 million of the company's shares in exploration costs of a well that is expected go be drilled in 2018, according to industry sources. By contrast, $ 400 million was paid in the case of the adjacent blocks in Senegal, making these figures appear minuscule, even when the size of the blocks in the adjacent areas in Senegal cover larger areas.
According to FAR's own estimates, Blocks 2 and 5 have the potential of producing in excess of one billion barrels of oil. Block 2 as indicated earlier, is adjacent to Senegal offshore block in which FAR already has an interest as junior partner of the Scottish Cairn Energy that operates the SNE world class oil and gas field,
Since the Erin-FAR deal is subject to government approval, the Barrow government must revisit this particular contract Agreement i.e. between Erin (formally CAMAC) and Yaya Jammeh. Pertinent issues must be raised with Erin ( for Blocks 2 and 5) and African Petroleum Corporation (for Blocks 1 and 4) including the amount paid for the two licenses and to whom the monies were paid.
The circumstances that led African Petroleum Corporation's (APC) withdrawal of its arbitration request with the World Bank's International Center for Settlement of Investment Disputes after its license for Blocks 1 and 4 were terminated by Jammeh only to be reinstated without explanation must also be explained. Were the terms and conditions maintained as previously or were they varied? Obviously, more questions must be raised by the Barrow administration about all of these contracts and satisfactory answers provided by both APC and Erin.
Gambia's energy/petroleum sector is opaque for a reason. It allowed Jammeh to negotiate these deals personally with a select number of civil servants being privy to the details of the Agreement when these concessions should have been publicly tendered for transparency.
We need not remind readers that the Jammeh style of governance is unsustainable because it is inefficient and corrupt, depriving the public treasury much needed financial resources at the expense of Gambians who, on average, are living in abject poverty. The new government must reverse the trend by adopting best public procurement practices in the petroleum, energy and other public sectors.
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CORRECTION : The $ 400 M referenced in this blog was paid by Kosmos to Petrotim for the Deep Sea - St. Louis Block and not the adjacent blocks as initially reported.
