Sunny Hill Energy, formerly known as Petroceltic International, said on Thursday that Algeria has seized its 38.25 per cent stake in a natural gas project and vowed to pursue a $1 billion (€830 million) compensation claim.
Petroceltic, which was based in Dublin, was taken over in 2016 by a fund called World Capital Management, controlled by Bulgarian businessman Angelo Moskov, following a bitter takeover battle. It resulted in the resignations of Petroceltic's chief executive Brian O'Cathain, chief financial officer Tom Hickey and the wider board.
The business subsequently moved the head office to London and was renamed as Sunny Hill.
Sunny Hill said that Sonatrach, Algeria's national energy company, has "terminated the contractual interest" held by the firm, through its subsidiary Petroceltic Ain Tsila in the world class Ain Tsila gas field in the southeast of the country.
“Sonatrach has acted in an aggressive and irrational manner. Their expropriation of our interest without compensation is the type of action expected in Hugo Chavez’s Venezuela and not from a country like Algeria that proclaims to respect the rule of law,” said Mr Moskov, chairman of Sunny Hill.
“We will robustly pursue our claims taking all actions to protect our interests. This will include making a claim for compensation from Sonatrach and/or the State of Algeria well in excess of US$1 billion.”
Acted lawfully
Sonatrach said it acted lawfully when it terminated the contract and gave Sunny Hill four months’ notice. It said a development plan for the project had been approved in 2012 with a forecast commissioning date of 2017 to produce at least 10 million cubic metres of natural gas, 17,000 barrels of liquefied petroleum gas and 11,500 barrels of condensate a day.
It said it would continue development efforts to bring it into production in November 2022.
Sunny Hill Energy disputes the validity of the contract termination.
Algeria is the Arab world’s biggest exporter of liquefied natural gas after Qatar. It provides roughly 10 per cent of Europe’s gas imports.
The government, which has faced two years of mass protests, is promising a new hydrocarbon law that would allow more foreign investment in the tightly controlled sector. Any approval of the Bill would likely have to take place after June's parliamentary elections in the country. – Additional reporting: Bloomberg, Reuters
