LONDON, 3 May 2021 – The UK-based Sunny Hill Energy says it will claim $1 billion in compensation from Algeria for ousting them from the Ain Tsila gas project.

The Algerian state-run oil and gas company, SONATRACH, terminated the contractual interests of Sunny Hill – formerly Petroceltic International – in the project last April 15.

Algerian Terminates Ain Tsila Field - Photo Offshore Technology

Algerian Terminates Ain Tsila Field – Photo Offshore Technology

UK-Based Firm to Seek $1 Billion in Compensation - Photo Sunny Hill Energy

UK-Based Firm to Seek $1 Billion in Compensation – Photo Sunny Hill Energy

The action we took was “in compliance with the contract”, said SONATRACH, blaming Sunny Hill for failing to comply with its contractual obligations.

Under the contract, Sunny Hill held a 38.25 percent stake in the Ain Tsila gas project which is four years behind schedule.

The project was initially expected to come on stream in 2017.

SONATRACH held a 43.37 percent on the project with Italy’s ENEL holding the balance of 18.37 percent.

The actions of SONATRACH are “highly damaging to the attempts by Algeria to attract foreign investment into the country,” said Sunny Hill Chairperson Angelo Moskov.

Ain Tsila Field - Source Mees

Ain Tsila Field – Source Mees

Contract Terminated - Photo Sunny Hill Energy

Contract Terminated – Photo Sunny Hill Energy

“Energy companies either already active in Algeria or potentially interested in Algeria all recognize that the Sunny Hill situation is specific to Sunny Hill and is not the beginning of an expropriation trend in Algeria, said NARCO’s Porter.

Algeria’s oil production declined from a peak of 1.4 million barrels per day in 2008 to around 1.0 million barrels per day in early 2020.

The country’s production has dropped further to around 800,000 barrels per day ever since the Organization of Petroleum Producing Countries (OPEC) imposed drastic quotas due to the oil market collapse caused by the new coronavirus pandemic.

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