Algeria bars “Dragon Oil” from grabbing Petroceltic’s share in Illizi gas field

Algeria is poised to bar the energy group “Dragon Oil”, based in Dubai, from taking over a stake from Irish gas and oil company “Petroceltic” in the projected exploitation of Ain Tsila gas and condensate field located in the region of Illizi in south-eastern Algeria.

The move followed documented reports obtained by the Algerian energy ministry and Sonatrach purporting that “Dragon Oil” has been suspected of engaging in graft and corruption practices in securing hefty energy-related deals in some parts of the world.

In this connection, Sonatrach under the injunctions of the Algerian higher authorities is now utterly shunning those energy firms suspected of bribery practices and which are seeking to grab economic spin-offs in Algeria.

For its part, Ireland’s Petroceltic International Plc has revealed in a press release that development drilling is going on according to plan in Algeria.

The AT-10 well is the first of up to 24 development wells to be drilled at the group’s flagship Ain Tsila gas and condensate field.

It was drilled to a depth of 2,005 metres, and penetrated a 61 metre gas and condensate zone.

Analysis of the well results indicated that AT-10 is in line with the pre-drill prognosis, and the anticipated offtake rates are comparable to certain previous wells which delivered flow rates of 30mln cubic feet per day during testing, Petroceltic said.

Petroceltic owns 38.25% of Ain Tsila field, alongside partners Enel (with 18.375%) and Algeria’s state-backed Sonatrach which owns 43.375%.

The Ain Tsila development is designed to establish a plateau production rate of 355mln cubic feet per day.

“We are delighted that AT-10 result confirms the success of earlier wells in the highly productive northern part of the field,” said Brian O’Cathain, Petroceltic chief executive.

O’Cathain also highlighted that contractor Sinopec and the drilling rig performed above expectations with the AT-10 well and there are also further improvement initiatives planned to reduce future well costs.

“We anticipate further operational updates and enhancements to the development plan in the near future,” he added.

The positive operational update comes amid uncertainty over the group’s future.