New Projects and good prospects. will be the winner in 2004. IMO
25p in early 2004

Today's announcement was the expected Italian tie up. More news to follow.

Reply from PCI to a recent email:

I'm sure you will appreciate that any announcements re. Drilling news and
further North African Acquisitions are of a price sensitive nature and a
such will be announced to all shareholders via the Stock Exchange. I have
your email address and will ensure that any announcements that are made are
sent to you when they come out.

I'm not entirely sure on what your assumption that PCI will release news in
June is based.

You will see that in the AGM statement made on 21 April the company is at an
advanced state of negotiation on the acquisition of a major interest, in
Europe, in a substantial offshore oil appraisal project. At the time
Petroceltic said that it expects to be in a position to make an announcement
on this project "shortly". We are still awaiting such an annoucement to be
made.

Petroceltic also said in this statement that it is in discussions with a
number of international companies on potential joint ventures in Tunisia. It
is also analysing oil and gas opportunities in Algeria and Libya. No time scale was placed on these and should these discussions prove fruitful PCI will be obliged to make a statement to the stock exchange.

Finally you are correct re Drilling in Tunisia in the AGM statement the
company said that it anticipates drilling a well on the prospect by August.

I hope this is helpful.

Kind regards,


Paul McManus

Offer is now 11.5p and rising!

Percentage Gainers

EPIC Name Price Change(%)
1 (1) PEEL Peel Hldgs. 1230.0 35 A
2 (2) LPY Leisureplay 3.75 19
3 (3) NEB Netb2b2 1.1 18 A
4 (4) TMN Themutual.NET 0.205 16 A
5 (5) XEN Xenova Grp. 11.25 16
6 (6) CLC Clinical Comp. 25.0 13
7 (7) PCI Petroceltic 11.35 13 A

June 7, 2004

Libya: The Government Hopes To Attract US$30 Billion Of Foreign Investment In The Oil And Gas Sector

By Barney Smith

When President George Bush launched his war on terror, Libya was seen as a paid up member of the so-called Axis of Evil. Thus in political and diplomatic terms it was as significant as it was unexpected when Colonel Muammar Ghaddfi, the Libya leader renounced terrorism and announced in December 2003 that he had terminated his programme of weapons of mass destruction.

The reasons for this dramatic change of attitude were complex. Doubtless the invasion of Iraq helped drive home the thought that other members of the Axis of Evil might also be potential US targets. But the decision was more likely the culmination of slow process which started with the strong US reaction to the 1986 Lockerbie bombing. This involved both air strikes and a trade embargo entailing the withdrawal of all US oil companies still operating in Libya.

The economy had already been weakened by the idiosyncratic basis on which the economy had been run since 1970 when it produced 3.3.million bpd, more than double todays production of 1.5 million bpd. So the embargo, and the sanctions subsequently imposed by the UN in 1992, had an increasingly serious impact. (A striking, though almost perhaps typical example is the decline in production of the 5 fields formerly operated by the American Oasis consortium. When they pulled out in 1986 production was 400,000 bpd. Today the figure is only 100,000 bpd. The embargo simply made it impossible to get parts for the machinery installed by the consortium.)

The sanctions also had a domestic political effect, creating a sense of frustration with Libyas international isolation. But perhaps more serious was the steady growth of the feeling that the economy was not delivering the new jobs needed by the younger generation, resulting in their increasing alienation from the regime and it principles. An outbreak of religious dissent underlined the message from events in next-door Algeria that Islam can have great attractions for those disappointed by the unfulfilled promises of Socialism.






A changing attitude to the Lockerbie issue enabled Libya to secure the suspension of UN sanctions in 1999 and their final abolition in September 2003. This went hand in hand with a more market-orientated approach to the economy as it became clear that reform was essential. The pace quickened in the summer of 2003 with the appointment of a new prime minister, Shukri Ghanem, an economist, whose task was to promote foreign investment not only in the oil sector, but across the board, including tourism. He was also committed to abolishing the public sector. He promised a programme to privatise 360 companies by 2008, together with tax reductions, unification of the dual exchange rate system, and reform of the foreign investment law.

These moves have a better chance because, over the last few years, some of the economic numbers have started to improve. Oil export revenues in 1998 were US$5.9 billion. Helped by rising oil prices they rose to US$13.4 billion in 2003. This rise was highly significant since oil exports account for 95 per cent of hard currency earnings and 75 per cent of Government resources. Buoyant revenues have resulted in comfortable foreign exchange reserves, a current account surplus, a fiscal surplus and a GDP per capita figure the highest in Africa, along with Botswana and its diamonds.

But effective modernisation of the Libyan economy requires structural change. The population, though still under 6 million, is rising and the economy is not well designed for creating employment (the swollen public sector takes 60 per cent of the government budget). The physical infrastructure is poor, particularly roads and logistics. But perhaps more important for attracting foreign investment is the need to improve the commercial law framework and offer better legal protection. All this constitutes quite a challenge.

However the potential rewards are on the same large scale. Libya is sitting on 3 per cent of the worlds oil, with proven oil reserves of 29.5 billion barrels, together with 1.5 per cent of the worlds gas (46.4 trillion cubic feet and maybe much more.) Yet in spite of a long history stretching back to 1959 for exploration and 1961 for production, Libya is comparatively unexplored. As a result of the sanctions and the hard terms sought by the Libyan government, only 25 per cent of the countrys area is covered by agreements with oil companies. In addition, the crude is high quality and production costs are extremely low, down to US$1 per barrel in the case of ENIs vast Elephant field. Finally, Libya benefits from a Mediterranean location. Italy, Spain, France and Germany take 75 per cent of Libyas oil and their oil companies have substantial operations there.

In order to achieve the Governments target of raising production to 2 million bpd by 2010, it is estimated that some US$30 billion of investment is needed, partly to develop the new fields, partly to introduce modern enhanced oil recovery techniques, and partly to renovate existing facilities. There is no shortage of external interest. Apart from the European companies already present, some old players are getting back into the act. At the time of UK Prime Minister Tony Blairs recent visit, there was the announcement of a long-term strategic partnership between the Libyan State Energy Company and Shell, which was active in Libya from the late 50s until 1974, and did some further exploration work in the late 80s. In addition there has been a technical visit by the members of the old Oasis consortium (Marathon, ConocoPhillips and Amerada-Hess). The Libyans have reportedly suggested they build an LNG plant on their old concession.

There are some new players too: the Indians and the Turks have a joint interest in the concession blocks and the Chinese National Petroleum Co has completed a US$230 million pipeline project. And, in the largest deal of them all, Petronas of Malaysia and Nimr Petrol of Saudi Arabia have been designated as operators of the entire November 7th Concession, the area jointly owned by Libya and Tunisia, estimated to contain 3.7 billion barrels of oil and nearly 12 trillion cubic feet of natural gas.

The message seems to be that foreigners are welcome, but not just western foreigners.

Grevis... i visit ADVFN soemtimes... what boards do u suggests. BTW. Many thanks for your post. We will appreciated if you also keep this board updated. Ta

xmortal: Seems that ADV are the dominant force for BBs but keep it up on here as well. The more who learn about this stock the better. PCI stand a good chance of hitting paydirt in Tunisia and if they do, then this stock will double from here. Good luck.

Small Cap Company with excellent prospects.
Great news just released.
The company's share price is undervalued and it should be the big winner soon.

Here is the broker note from January that gives a "conservative" value of 18p :

http://www.davy.ie/other/email/petrocr20040121.pdf

Here is a company presentation from January/Febuary time :

http://www.petroceltic.ie/pub/Petroceltic-preJan04.pdf

Here is the AGM presenation from April :

http://www.petroceltic.ie/pub/PetroAGM-presentation.pdf

This is from Oilbarrel.com,10.12.2003
Small But Ambitious Petroceltic Makes Progress With Two Possible Company Making Projects In Ireland And Tunisia
Petroceltic International is a small Irish and London AIM listed company, which is transforming itself from a mining company into an oil and gas concern. It was Ennex International which had interests in Kazakhstan. Renamed Petroceltic, it has a market capitalisation of around about 10 million. It has cash of about 1.8 million, some which it gained from a share placing raising, and the rest from the sale of investment interests, notably in Faroe Petroleum which floated fairly recently in London.

There is cash flow of about US$400,000 net per annum from an ongoing royalty from the Kinsale Head gas field in the Celtic Sea offshore Ireland. At the time of writing Kinsale Head is Irelands only producing gas field, although Ramco is expected to announce any day that production has started from its Seven Heads fields, also in the Celtic Sea. Kinsale is a mature field, but its life has been extended to 2012.

Petroceltics royalty income is expected to rise to US$500,000 in 2005. That for the moment is it, apart from some residual mining interests in Kazakhstan which do not produce any income just now.

But Petroceltic is nothing if not ambitious. It is currently progressing two low risk/high reward projects. The first, in the Celtic Sea Ireland, could be a company maker. The second, onshore Tunisia, North Africa could be described as possibly a jumbo company maker. Petroceltic has paid 82,609 in cash, and 82,609 in shares for an option to participate to the extent of 38 per cent in the licensing option covering part blocks 49/17, 49/22 and 49/23 in the Celtic Sea, granted to private group Island Expro. The option lasts until next August.

Gas was first discovered offshore Ireland in 1971 and the Kinsale Head field was brought into production in 1978 with reserves thought to be around 1 trillion cubic feet of gas. These have subsequently been upgraded to 2 trillion cubic feet. The field has been run by US group Marathon. Marathon explored for gas elsewhere and had finds in the Seven Heads field in the 1980s. These discoveries were not developed because Ireland at that time was a peripheral economy on the edge of Europe with little demand for gas. The emphasis switched to oil, and various groups drilled in the Celtic Sea but without real success.

The position has changed in that after a decade of strong economic growth Ireland is now hungry for locally flowing gas. Ramco took up the challenge and developed the Seven Heads field. Scottish based Ramco owns 86.75 per cent of the licence and is expected to produce 60 million cubic feet a day imminently.

Island Expro is run by Paul Griffiths and Viv Castens who were instrumental, through an earlier company, in getting Ramco involved in Seven Heads. They are hoping for success with the new part blocks 49/17, 49/22 and 49/23. These lie immediately to the southeast of the Kinsale Head gas field. The prime focus in this acreage will be for gas from the Lower Cretaceous Greensand (A Sand), the principal reservoir in the Kinsale Head gas field. The Lower Cretaceous Upper Wealdon (B), the principal reservoir in the Seven Heads gas field, is the secondary objective. There are at least two well-defined prospects. The companies are looking to find 1 trillion cubic feet of gas. This would be more than has so far been found at Seven Heads.

Petroceltics own model for the project says the risked value to the company, at a Net Present Value discounted at 10 per cent, would be 27 million to Petroceltic or around 8p per share. This assumes gross P50 reserves of 850 billion cubic feet of gas are found, a 38 per cent Petroceltic equity, a 25 per cent corporation tax, a 0.20 per therm gas price and that the Kinsale infrastructure is available for use. The company assumes a risk ratio factor of 1: 4.

The figures for the Tunisian project are even more jaw-dropping. Petroceltic is confident of signing soon a Production Sharing Contract with the Tunsian government for a 7,000 sq kms block near Libyan and Tunisian oil and gas finds. The Sidi Toui field is an Ordvician prospect, similar to other giant fractured Ordovician oil fields in North Africa including Hassi Messoud, Amal, Elephant, and Rhourd El Baguel. Petroceltic admits it has been lucky to come across the fields and fortunate that they have not been snapped up by other larger companies.

The Sidi Toui field was found for Petroceltic by geo-physicist Robert Bencini who is an old friend of John Craven, co-founder and managing director of Petroceltic. Bencini is the man who first found the Elephant field in Libya. The Elephant Field holds recoverable reserves of 560 million barrels of 38 per cent API sweet oil. The reservoir is naturally fractured quartzitic sandstone. The reservoir age is Cambro-Ordovician. It was declared commercial in February 1991. Sidi Toui is reckoned to be an analogue of Elephant and could hold 400 million barrels of oil reserves plus some gas.

Petroceltics model is that there could be a risked value to the company, at a Net Present Value discounted at 10 per cent, of 173 million or 50p a share. This assumes P50 reserves of 400 million barrels of oil and 160 billion cubic feet of gas, production of 50,000 barrels of oil a day and a US$20 per barrel flat oil price. Petrocletic reckons it would cost US$1.5 million to drill a well, and is thinking it might sole risk the project. It sounds mouth-watering, but as always it has to be pointed out that although such a project can be considered low risk, it is, nevertheless, like all oil and gas exploration projects, risky. You never know what is there until you drill.

Many thanks for your input, greatly appreciated.......lets hope some floor gets built around this prices before the next set of news.......

We can really do with some news on Libya and Algeria......They have mega massive gas and oil reserves.

xmortal: Apparently their Tunisian geoformation is similar to some of Algeria's biggest finds. This is according to one chap who has just returned from BP's production fields out there. All sounds pretty promising and yet another reason why the price is strengthening.

Many thanks Gravis2..... I am very confident PCI will move to 20p by the end of July.

Here is today presentation......To all of you have a read..... mega promising and exciting flow of news for the rest of 2004 and 2005.

http://www.petroceltic.ie/pub/June_30_2004.pdf

Good to see the price is on the up again after early profit taking.

Hi All,

I suppose some profit taking was bound to happen today on the back of yesterdays good rise. I've bought in twice on these and am holding for the long term.

gavdfc: This one looks like a good medium term bet. Their strategy seems to be to find the oil and for others to bear the cost of development. In that way they can more quickly enhance shareholder value.

Hi Grevis,

You're right, this does look a good bet. And from what i can make out, it doesnt seem like the company are putting all their eggs in one basket, thus spreading the risk. I dont know lots about oil companies, but spreading the risk, finding the oil and let others develop it sounds good to me.

gavdfc: Seems as though we are not the only ones who like this stock. Fidelity has joined Gartmore in topping up their holdings. Should be good for tomorrow's share price. This announcement was made just after 4.00 PM this afternoon:


RNS Number:3924A
Petroceltic International PLC
01 July 2004

Petroceltic International plc

01 July 2004


Petroceltic International plc ('Petroceltic' or the 'Company')

Holding in Company

The Company has received a notification dated 28 June 2004 from FMR Corp. and
Fidelity International Limited (together "Fidelity") stating that Fidelity hold
30,394,294 ordinary shares representing 6.13 per cent. of the Company's issued
ordinary share capital. The shares are held on behalf of a range of clients with
the following nominee/registered names;

Mellon Bank 19,545,887

Chase Manhattan Bank, London 7,575,811

Brown Brothers Harriman Ltd., LUX 861,250

Deutsche Bank AG London 674,228

HSBC 1,737,118

This was Gartmore's announcement:

RNS Number:8866Z
Petroceltic International PLC
17 June 2004


Petroceltic International plc ('Petroceltic' or the 'Company')

Holding in Company


The Company has received a notification dated 14th June 2004 from Gartmore
Investment Management plc stating that, Gartmore Investment Limited, Gartmore
Global Partners and Gartmore Fund Managers Limited hold, in aggregate,
41,345,349 ordinary shares of Euro0.0125 each in the Company, representing
approximately 8.34 per cent. of the Company's issued ordinary share capital.

17th June 2004


This information is provided by RNS
The company news service from the London Stock Exchange
END

Some good read here:

Global oil capacity growth hinges on mega-projects
Thu 1 July, 2004 13:44

By Jonathan Leff

LONDON (Reuters) - The smooth, prompt start-up of about a dozen big-ticket oil projects over the next 18 months is more important than ever to meeting global oil demand growth and keeping prices under control, analysts say.

These multi-million-dollar oilfield and pipeline plans should deliver 2.4 million barrels per day (bpd) of new production capacity before the end of 2005, mostly in non-OPEC areas such as the former Soviet Union, Brazil and West Africa, a Reuters survey found.

A host of second-tier developments adds more than one million bpd.

Delays to a few of these fields could propel oil's five-year price boom to new highs, with demand growth galloping at its fastest rate in 24 years and OPEC pumping closer to its own capacity than any time in more than a decade.

"The diminishing cushion of surplus capacity within OPEC means that there is real need for these big non-OPEC projects to come through," said Steve Turner of Commerzbank.

Just a few months ago analysts saw 2005 as a major test for OPEC, with a burst of new oil from non-cartel countries stealing market share. Now, the test is whether OPEC and other producers will be able to pump enough oil to keep up with consumption.

Driven by China's economic expansion, oil demand growth this year has surged an estimated 2.3 million bpd, while the rise in non-OPEC output will lag that substantially at only 1.2 million bpd, the International Energy Agency says.

Analysts expect average non-OPEC supply growth of around 0.8-1.4 million bpd next year, still likely to fall short of an estimated 1.5-2.0 million bpd rise in demand.

"The global oil industry has been caught out by two consecutive years of oil demand growth above two percent and production capacity has not risen fast enough to meet increased demand while maintaining a buffer of spare capacity," the Centre for Global Energy Studies said.

The shortfall in capacity growth next year has added a heightened sense of urgency for new fields to deliver on-time oil -- or risk a shortage.

The Organisation of the Petroleum Exporting Countries is now producing crude to within one to two million bpd of its maximum, or less than three percent of the 80 million bpd world market, analysts estimate.

With such a small margin of error, relatively minor supply hiccups can have a major impact on oil prices, which a month ago soared to 21-year peaks over $40.

Major outages like the Iraqi pipeline sabotage in June and last week's Norwegian strike have kept the market on edge.

"Had these disruptions lasted for months, as opposed to days, there would likely not have been enough excess capacity available worldwide to make up for the total loss of exports, resulting in upward price pressure," the U.S. Department of Energy said in a weekly report.

"Since capacity expansion involves substantial investment and long lead times, minimal spare capacity for the mid-term appears likely, barring a significant decline in oil demand growth."

SOME PROJECTS PRONE TO DELAYS

The 11 mega-projects of more than 150,000 bpd expected onstream before the end of next year are heavily concentrated in the former Soviet Union, Brazil and West Africa, a Reuters survey found.

International oil majors have focused on big projects as a drive to improve profit margins force them into frontier areas to find the big fields that bolster profits.

These emerging provinces have already suffered setbacks and delays.

Shell's flagship 225,000 bpd Bonga field in Nigeria has already been pushed back by more than a year and will now start up "well into" 2005, while Brazil's numerous offshore platforms have also suffered repeated delays.

Russian and Caspian production growth depends heavily on three near-term pipeline projects bringing the oil to market, one of which still needs government approval.

More than three-quarters of the new mega-projects will launch next year, with the majority delivering peak flows quickly since they are largely pipeline or offshore developments.

Including smaller developments, more than 3.5 million bpd of capacity at platform should be started up next year, up from 2.5 million bpd this year, according to Robert Skinner, director of the Oxford Institute of Energy Studies.

The estimates of new capacity next year are much higher than forecasts for non-OPEC production growth, which averages output over the year and takes into account declining production from mature basins like the North Sea, where production fell six percent last year.

CRUNCH MAY EASE

While the capacity crunch is big news now, there is no certainty it will last. OPEC's own capacity should increase in the medium-term, analysts say, while a near-term fall in prices should also take some of the pressure off.

"We believe there will be a significant price decline in the next six to 12 months," said Sarah Emerson of Boston-based Energy Security Analysis. "At that point the nervousness over tight spare capacity will drop off because OPEC is likely to cut back."

Nigeria and Saudi Arabia have big plans in the works in the next 18 months, but the real expansion should come from 2006 onward, analysts say.

Geoff Pyne, consultant for Sempra Energy, estimates cartel capacity, which stagnated around 30-32 million bpd for the past seven years, will climb to 35 million bpd by 2006.

Saudi Arabia has said it could raise its sustainable capacity by as much as four million bpd if demand warranted it, but says the 800,000 bpd of new oil from Qatif and Abu Safah flowing from October is only meant to offset intentional declines in older fields.

Libyan production is likely to get a fillip from the post-sanctions return of U.S. firms to frozen assets, while the United Arab Emirates, Iran and Nigeria all have projects in the works in several years' time.

Iraq holds the world's second-largest oil reserves and could probably ramp up production relatively quickly, but the massive investment necessary for that still appears years away.

xmortal: Good article. The world needs more oil!

Morning all,

Your right Grevis, seems like lots of people like this share! Good to see institutions buying more, long may it continue. Good article Xmortal, the world does indeed need more oil, and I can only see world demand for oil rising, as will the price in my view. Heres to a good day for PCI!