Algerian state oil firm Sonatrach is to pre-empt a planned farm-out of the Isarene field by partner Petroceltic.
The deal will see the national oil company paying $20million for the 18.375% stake in the field, along with carrying $140million in development costs.
Sonatrach will also pay two further installments of $10million if certain production targets are met, with the purchase increasing the firm’s stake in the field to 43.375%.
Petroceltic will keep a 38.25% share of the field, with Enel holding the rest.
Oil India had been in talks with Petroceltic to snap up the stake in the field, which is expected to contain more than 2trillion cubic feet of gas and 175million barrels of oil.
“The decision by Sonatrach to exercise its pre-emptive right is a clear indication of the current value and long term upside potential of the Isarene asset,” said Petroceltic chief executive Brian O’Cathain.
“Sonatrach’s decision to pre-empt confirms that the timely development of the Ain Tsila field is strategically important to Algeria and we look forward to working together to achieve this shared objective.”