Petroceltic agrees Algerian asset sale

Dublin-based exploration firm Petroceltic International has formally agreed the sale of a further tranche in one of its headline assets, the Ain Tsila gas field in Algeria, for a potential $180m (€133m).

Sonatrach — the Algerian State oil company and, up to now, a junior partner in the field — has agreed to purchase an additional 18.4% stake in the asset; thus boosting its overall share to just under 43.4%.

The company will pay Petroceltic — which will ultimately keep a 38.25% holding — an initial $20m, before covering $140m of development costs and making two contingent payments of $10m each, based on certain early production milestones being met.

The Irish company had controlled 56.6% of the asset — seen as being potentially one of the biggest gas finds in the world — since selling an 18.4% stake to Italian energy giant Enel in 2012; but it’s plan has always been to offload another similar sized shareholding.

While yesterday’s announcement was expected — Petroceltic’s management told shareholders at its May AGM that it hoped to conclude the second Algerian farm-out by the end of October — what is being viewed as a bonus, of sorts, is that Sonatrach has emerged as the buyer.

It was widely reported, during the summer, that Oil India — the second largest exploration firm in that country — was in talks to buy the stake from Petroceltic.

Sonatrach, however, chose to exercise its pre-emption right on the offer; a rare enough move in the sector and something of a vote of confidence in the project, according to commentators.

“The pre-emption by Sonatrach,” according to Job Langbroek of Davy Stockbrokers, “sends an important message about its [Ain Tsila’s] value”.

More in this section

IE logo


The Business Hub

News and analysis on business, money and jobs from Munster and beyond by our expert team of business writers.

Sign up
Puzzles logo

Puzzles hub

Visit our brain gym where you will find simple and cryptic crosswords, sudoku puzzles and much more. Updated at midnight every day. PS ... We would love to hear your feedback on the section right HERE.

News Wrap

A lunchtime summary of content highlights on the Irish Examiner website. Delivered at 1pm each day.

Sign up

Some of the best bits from direct to your inbox every Monday.

Sign up
Execution Time: 0.2 s