- LONDON: Irish oil explorer Petroceltic is eyeing oil and gas deals in Tunisia and Egypt to take advantage of a funding gap brought about by unrest in the North African region, said its chief executive.
“We’re looking at deals in Egypt, Tunisia and elsewhere. Both farm-ins and new license applications, but we’re mainly looking to get into farm-ins on development projects which people are finding it difficult to fund just now,” said Chief Executive Brian O’Cathain.
“Debt is not really available for North Africa because of what’s happened in Tunisia and Egypt and Libya.”
O’Cathain said Petroceltic will have $100 million of unallocated capital to spend on deals once a tie-up with Italian utility Enel on the company’s Isarene gas field in southern Algeria completes, something it expects to happen in the third quarter. Unrest in the North African region has not affected Petroceltic’s activities in Algeria, said O’Cathain, adding that he did not see doing a deal in Egypt or Tunisia, where revolutions took place earlier this year, as risky.
“We would be worried about getting into Yemen just now or to southern Sudan, but Egypt, Tunisia, I think in a year’s time will be open, will be back to normal,” he said.
Petroceltic is undertaking further drilling at Isarene to help establish the size of the gas field before it can finalize proposals for a development project to start producing gas.
The project to develop the gas field, estimated to have between 6 trillion and 12 trillion cubic feet of gas, making it a large gas field, will cost over $1 billion, said O’Cathain.
“That’s too big for a company of our size,” he said. “We’d like to bring in an existing, established operator. We’d aim to maintain a stake and be carried by them.” Petroceltic has a market capitalization of 206 million pounds ($328 million).
Oil majors such as Total SA, BP, Statoil and Repsol own gas fields adjacent to Petroceltic’s in Algeria and could all be possible candidates to become involved in the Isarene development, said O’Cathain.
“We’re not really focused on becoming a production company, we’re very much an exploration-driven company,” O’Cathain said, adding the firm wanted to establish a cash flow to fund exploration without needing to raise additional equity.