Dubai: Dragon Oil, in which the Dubai Government owns a majority stake, is in talks to buy out fellow London-listed energy producer Petroceltic for £492 million ($786 million, or Dh2.88 billion) in a bid to increase its presence in North Africa.
Petroceltic said on Monday it has submitted a proposed offer from Dragon Oil to its board at £2.30 a share, 35 per cent higher than the company’s recent average stock price.
At 11am London time, Petroceltic shares were up 21.57 per cent to £2.17, while Dragon Oil shares had dipped 0.87 per cent to £5.69.
The proposal is not a firm offer and needs to be approved by Dragon Oil’s majority shareholder; the Dubai government-owned Emirates National Oil Company (Enoc).
Enoc, which holds a 54 per cent stake in Dragon Oil, was not available for comment on Monday.
Petroceltic said it is willing to recommend a firm offer.
Petroceltic owns an asset in Algeria, the Ain Tsila gas field. Dragon Oil, in partnership with Italy’s Enel, recently obtained new drilling licences in Algeria.
“Given the portfolio of [Petroceltic’s] assets, its fits our strategy of diversification,” a Dragon Oil spokesperson told Gulf News by phone.
Dragon Oil’s main asset is in Turkmenistan but it also has a presence in Tunisia, Iraq, Afghanistan, Egypt and the Philippines.
“One of the strengths of Dragon Oil is to diversify and we have been looking at Africa and the Middle East for some time,” the spokesperson said.
Petroceltic also has assets in Egypt and the Kurdistan region of Iraq as well as in Europe.
