Spanish energy major Iberdrola has agreed to form a strategic gas upstream alliance with Ireland-based Petroceltic International. As part of the alliance, Iberdrola has agreed to subscribe to 215.8 million new shares in Petroceltic for E35.2 million, representing 22.6% of the enlarged share capital in the Irish company.
Iberdrola will have a two year option to acquire a 49% interest in any single upstream asset from Petroceltic’s portfolio. The capital increase will comprise two stages, the first accounting for 147.5 million shares, and the second a transaction for 68.3 million shares, subject to approval by Petroceltics’s general shareholders meeting on August 14, 2008.
The agreements are expected to allow Iberdrola to enter the upstream sector with an appropriate-sized investment.
Petrocelctic reportedly has a well diversified portfolio of assets, with potential gas reserves of 27.7 billion cubic meters and potential oil reserves of 75 million barrels.
Petroceltic has exploration assets in Algeria, Italy and Tunisia and a royalty interest in the Kinsale Head gas field in Ireland. The company is present in Algeria through a significant license in partnership with Sonatrach.