A Norwegian independent exploration and production company and one of the partners in Aje oilfield located in Oil Mining Lease (OML) 113, Panoro Energy, has stated that the partners in the Lagos oilfield had commenced negotiations to resolve their legal dispute.
Panoro Energy had dragged the other partners to the London court, and had also filed a request for arbitration with the secretariat of the International Chamber of Commerce.
Panoro, through its fully owned subsidiary, Pan Petroleum Aje Limited (PPAL), holds 6.502 per cent participation interest in OML 113.
Folawiyo Aje Services Ltd (FASL), a wholly owned subsidiary of Yinka Folawiyo Petroleum, is the operator of the field, which commenced crude oil production on May 3, 2016
Other partners include: New Age Exploration Nigeria Limited, Pan Petroleum, Energy Equity Resources (EER) Nigeria Limited and PR Oil and Gas Nigeria Limited.
The dispute between the partners followed the passing of resolutions in 2016 by the JV partners with respect to a proposed new well to be drilled and the related cash call to be paid by the partners.
Even though the Oslo-listed Panoro said it had the financial ability to fully pay its own share of the cash call, the company had also insisted that the drilling of any new well was premature at that stage.
Panoro had also argued that the decision to incur such additional capital expenditures at Aje would require unanimous consent of the joint venture partners in accordance with the Joint Operating Agreement (JOA).
It had further alleged that there was no such consent before the decision to drill new wells was reached.
The company had also added that it initiated the legal proceedings and arbitration to protect its interests.
In order to prevent the other partners from taking actions that could affect Panoro's continued participation in the OML 113, the company dragged the JV partners to the Commercial Court Division of the High Court in London seeking an interim injunction in order to prevent the other joint venture partners from exercising any rights under the default provisions of the OML 113 JOA.
But in its third quarter 2017 results and operations and corporate updates, released by the company at the weekend, Panoro Energy disclosed that "significant measures have been taken to resolve the dispute, while discussions were underway on full settlement
The company added that during an interim period of approximately one year, all spending at Aje shall be limited to proceeds from sale of crude.
The company had opposed incurring additional costs by the partners in drilling new wells.
Commenting on the third quarter results, the Chief Executive Officer of the company, Mr. John Hamilton, acknowledged that "at Aje, material steps have been taken towards a final legal settlement of the ongoing dispute, and the JV is now focused on moving forward, with a common goal of realising the potential at OML 113."
Panoro Energy ASA is an independent E&P company based in London and listed on the Oslo Stock Exchange with ticker PEN.
The company holds production, exploration and development assets in West Africa, namely the Dussafu License offshore southern Gabon, and OML 113 offshore, Lagos.