Petrofac Acquire Interest in Chergui Concession in Tunisia

Petrofac's Resources division agrees to acquire a 45% interest in the Chergui concession, Tunisia, for a cash consideration of approximately US$30 million. Petrofac will be operator of the concession.

Petrofac has agreed to acquire the interest from Entreprise Tunisienne D'Activities Petrolieres (ETAP), the Tunisian state oil company, which holds the remaining 55% interest. Completion of the transaction remains subject to approval by the relevant government authorities.

The Chergui gas field, located on and around Kerkennah Island, near Sfax, Tunisia, was discovered as part of the West Kerkennah exploration permit granted in the late 1970's with preliminary reserves estimates of approximately 50 billion standard cubic feet (SCF) under the anticipated development programme. Petrofac's share of the investment required to complete the development is expected to be approximately $20 million. The construction of a 20 million SCF per day central production facility and a 57km pipeline to shore is already underway, the completion of which will be managed by Petrofac. Commencement of production from the field is expected during 2007, with plateau rates expected to be maintained for around four years with a further eight years of operation beyond that. Produced gas is to be sold to Société Tunisienne d'Electricité et Gaz (STEG) under the gas pricing formula fixed by existing law, in which the price of gas is linked to FOB Med Fuel oil prices.

Amjad Bseisu, chief executive of Petrofac Resources, said: "Tunisia has a well-developed and stable hydrocarbon regime which offers interesting opportunities for Petrofac. We believe that the objectives of ETAP and the Tunisian government can be met through our strong engineering and operational capabilities whilst co-investment with ETAP ensures alignment as their development partner. Chergui is an attractive investment and fits our business model of working with national oil companies and local partners to catalyse developments."

Ayman Asfari, group chief executive, Petrofac Limited, said: "We have been active in Tunisia through our Engineering & Construction division for some time and this investment brings an exciting opportunity to leverage our service divisions' capabilities whilst acting as the development partner to a national oil company."

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Posted 13/11/06

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