Ex-Deutsche Bank Trader Moskov Says Algeria Seizes Gas Asset
A company controlled by former Deutsche Bank AG trader Angelo Moskov accused Algeria of seizing its stake in a natural gas project and is demanding more than $1 billion in compensation.
U.K.-based Sunny Hill Energy has a 38.25% interest in the Ain Tsila gas project through its Petroceltic Ain Tsila subsidiary. Sonatrach, Algeria’s state energy firm, has terminated that contractual interest without offering compensation, Sunny Hill said in a statement Thursday.
Sunny Hill has invested hundreds of millions of dollars in the project, 1,100 kilometers southeast of Algiers, it said.
“We will robustly pursue our claims,” said Moskov, chairman of Sunny Hill. “We have fully met our contractual obligations.”
Sonatrach said it acted lawfully when it terminated the contract and gave Sunny Hill four months’ notice. Production, initially expected to start in 2017, should begin in November 2022, it said.
“We tried to do the maximum with him,” Toufik Hakkar, Sonatrach’s chief executive officer, said in a phone interview. “We can’t tolerate delays in projects. It is a strategic project for Algeria and Sonatrach.”
Petroceltic should transfer all operations in the project to Sonatrach, the Algerian firm said in a separate statement.
Petrofac Ltd. won a $1 billion contract to build a gas processing plant as part of the project in 2019. When the contract was signed it was agreed the plant would start producing gas, liquefied petroleum gas and condensate for the local and export markets by the end of next year.
Algeria is the Arab world’s biggest exporter of liquefied natural gas after Qatar, according to data compiled by Bloomberg. It provides roughly 10% of Europe’s gas imports.
The government, which has faced two years of mass protests, is promising a new hydrocarbon law that would allow more foreign investment in the tightly controlled sector. Any approval of the bill would likely have to take place after June’s parliamentary elections.
“Sonatrach has acted in an aggressive and irrational manner,” said Moskov. It’s an “attempted expropriation” and “this unwarranted action will be highly damaging to the attempts by Algeria to attract foreign investment into the country.”
Sunny Hill is owned by Moskov’s London-based Worldview Capital Management LLP. It acquired a stake in the Algeria project after a bitter tussle to take control of Dublin-based oil and gas explorer Petroceltic International Plc in 2015.
Moskov, a Bulgarian, used to be a proprietary trader at Deutsche Bank. He left in 2004 to become an activist investor.
Petrofac declined to comment.
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