Petroceltic set to oversee $2bn Algerian project
Gas investment among biggest-ever Irish deals
Published 03/08/2014 | 02:30
Petroceltic International, an Irish oil and gas exploration and production company focused on the Middle East and North Africa, is set to launch a $2bn investment in Algeria later this year.
The investment will be one of the largest-ever undertaken by an Irish firm overseas. It propels Dublin and London-listed Petroceltic into a select group of companies, such as the banks, CRH and Smurfit, which have made billion-dollar investments abroad.
The company has revealed details of the plans in the past but the investment is now bigger and earlier than expected.
Petroceltic boss Brian O'Cathain is believed to have travelled to Algeria last week for meetings with the energy ministry and returned to Ireland yesterday.
In a decade, Petroceltic has expanded from a tiny firm in a basement in Dublin 6 into one of the largest companies on the stock exchange, with more than 1,000 employees. It recently completed a merger with a rival and fended off approaches from an overseas hedge fund which eventually led to several Irish oil industry veterans being forced to step down from the board.
Petroceltic will oversee the €2bn expenditure in the Ain Tsila gas project in southern Algeria on its own behalf and on behalf of two partners: Italian energy behemoth Enel and Sonatrach, which is Algeria's state-owned oil and gas company. The costs will be split between the partners. Petroceltic has a 38.25pc interest in the field and remains operator of the licence.
Petroceltic signed a deal in Algiers in February to sell Sonatrach an 18.4pc stake in the field for as much as $180m, depending on the amount of oil and gas produced by the field.
Sonatrach will transport the gas from Petroceltic's isolated gas fields to the country's Mediterranean coast, where it will then enter the European gas supply and offer an alternative to much of the gas currently coming from Vladimir Putin's Russia.
The investment will cap a 10-year investment by Petroceltic, which was awarded operatorship of the Isarene gas and oil fields in April 2005.
The company first found gas in the Ain Tsila area in 2009. Geologists believe the field will provide vast quantities of gas for 30 years.
Petroceltic and its partners must now build a gas processing plant and will need a 95-kilometre pipeline to tie into the main Algerian gas transmission network.
The investment will cap a difficult few months for Petroceltic, which last month was forced to reduce its board by two members and appoint two new non-executive directors nominated by interventionist shareholder Worldview Capital Management.
The changes met Worldview's demands to reshuffle the board after the fund, which owns 20pc of Petroceltic, blocked a $100m share placement.
The reshuffle creates an unusual situation in which chief financial officer Tom Hickey and chief operating officer David Thomas have left the board but retain day-to-day roles. The hedge fund chose two former RusPetro directors to join the board.
Sunday Indo Business