African Petroleum’s rights to explore in two offshore Gambian oil blocks have expired and are currently “open for licensing”, Presidential Spokeswoman, Amie Bojang, told the Media.
The comments came after a statement from the Oslo-listed firm earlier in the day.
The firm said that it was prepared to launch legal proceedings to defend its rights to the blocks in early September if it did not receive positive news from the government.
The A1 and A4 oil blocks are thought to contain up to 3 billion barrels of oil and are adjacent to licences in neighbouring Senegal where large discoveries have been made.
Shares in African Petroleum closed down 11.48 per cent on Monday, lagging a flat Oslo benchmark index.
Gambian oil officials first told Media in July that they did not plan to extend the firm’s exploration rights, citing a failure to meet its commitments.
But African Petroleum says it maintains the legal rights to the blocks.
Jens Pace, Chief Executive has since held talks with President Adama Barrow, who replaced long-ruling Yahya Jammeh in January, in an attempt to resolve the disagreement.