Petroleum Africa
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Thursday, September 18, 2014
Petroceltic International saw a significant amount of progress during H1 on its Algerian asset, the Isarene Permit, that has moved it closer to production. In July, the company completed the farm out of a further 18.375% interest in the field to Sonatrach, following Sonatrach’s preemption in 2013 of Petroceltic’s deal with another firm. Completion occurred when the deal was ratified by the Algerian authorities and published in the official journal of Algeria on July 7.
Sonatrach paid Petroceltic a consideration of $20 million in initial cash payment. Sonatrach is also responsible for a cost carry of $140 million and two further potential payments of $10 million, each contingent on the achievement of certain key project and production related milestones. Post completion, Petroceltic has a 38.25% interest, Sonatrach has a 43.375% interest, and Enel maintains its 18.375% interest.
Following the execution of a legally binding Heads of Terms for the Gas Sales Agreement (GSA) with Sonatrach in 2012, the comprehensive GSA detailing operational procedures and processes required for gas nominations and payments has recently been signed by all partners. In addition, the FEED contract was awarded to Chicago Bridge and Iron and signed earlier this month.
During the course of the FEED studies, the project cost estimate and schedule will be updated and the major project related construction contracts are expected to be tendered in late 2014 and awarded in 2015. Subsurface engineering and geoscience activities will focus on optimizing the development plan prior to the commencement of drilling in early 2015.
The Groupement will establish the technical and logistical office in Hassi Messaoud and development operations will ramp up in the Ain Tsila field, allowing for the mobilization of drilling rigs and construction crews in 2015.
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