His Excellency, President Adama Barrow on Tuesday got briefed by the Minister of Petroleum and Energy, Honourable Fafa Sanyang on The Gambia’s revised and amended petroleum licensing model.
The review of the Petroleum Exploration, Development, and Production Licences Model was necessitated by the need to upgrade it to international standards.
“This new model licence is of [an] international standard, which represents an improvement on the existing ones. It will hence be the basis for any future licence negotiations for The Gambia”, Minister Fafa Sanyang informed the president.
Based on the new model, FAR Ltd and PETRONAS now hold fifty percent (50%) shares each in Blocks A2 and A5.
Furthermore, it means that the existing licences of FAR and PETRONAS’ for blocks A2 & A5, which were signed in 2012, shall operate within the remits of the new licence model leading to the resumption of active exploration work on these blocks.
Consequently, the participating interests in the revised licences held by FAR and PETRONAS are currently 50% each, while the government of The Gambia reserves the right to take up to 15% participating interest.
As part of the agreement, the government will be paid a bonus of four million and five hundred thousand dollars ($4.5m) for both licences, along with training and resource contribution as well as surface rentals per annum.
Other issues that the new model takes into account include the introduction of additional profit, capital gain tax, payment requirements, and restructuring of the exploration periods and legal requirements.