Exploration company Petroceltic has said that the Algerian state oil company, Sonatrach, is to increase its stake in the Asarene licence in Algeria.

Following the agreement, Sonatrach’s stake in the field will rise to 43.375%, Petroceltic will own 38.25% and Enel 18.375%.

Petroceltic's chief executive Brian O'Cathain said the move by Sonatrach is a '"clear indication of the current value and long term upside potential of the Isarene asset".

He said the company believes this decision represents a positive endorsement of the technical, commercial and development work undertaken between the two companies over the last nine years.

"Sonatrach’s decision to pre-empt confirms that the timely development of the Ain Tsila field is strategically important to Algeria and we look forward to working together to achieve this shared objective," he added.

Petroceltic said the deal is not expected to have any impact on the overall timing for the awarding of major contracts or the starting of detailed development activities.