Algerian national oil company, Sonatrach, has terminated the contractual interest held by Sunny Hill Energy through its wholly-owned subsidiary, Petroceltic Ain Tsila, in the Ain Tsila gas field in southeast Algeria.
The reason for the termination has not been communicated by Sonatrach. Sunny Hill Energy announced that it intends to pursue all legal recourse to compensate it for the loss of its interest which Sunny Hill Energy values well over $1 billion.
In a statement, the Chairman of Sunny Hill Energy, Angelo Moskov said: “Sonatrach has acted in an aggressive and irrational manner. Their attempted 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. This unwarranted action will be highly damaging to the attempts by Algeria to attract foreign investment into the country.”
“We have strong legal advice that this action by Sonatrach is without legal merit. We have fully met our contractual obligations including providing our full share of resources required for the operation of the joint venture with Sonatrach. 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.”
SUNNY HILL ENERGY
Sunny Hill Energy through Petroceltic Ain Tsila has a 38.25% participating interest in the Ain Tsila project. Located around 1,100 km southeast of Algiers, the Ain Tsila field will produce gas, LPG and condensate for both the local Algerian market and export.
The company has (now had) significant ownership in the Ain Tsila project, which is a world-class gas and condensate reservoir in eastern Algeria. The company aimed to develop these resources rapidly, making Ain Tsila one of the largest gas production fields to come online in North Africa in recent times.