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    Petroceltic Alleges Bulgaria Fraud


Petroceltic's new owners said February 16 they have filed a criminal complaint against its former Bulgaria manager and others alleging fraud.

by: Mark Smedley

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Natural Gas & LNG News, Europe, Corporate, Litigation, Exploration & Production, News By Country, Bulgaria, Malta, United Kingdom

Petroceltic Alleges Bulgaria Fraud

Petroceltic, the formerly AIM-listed Irish explorer taken over in May-June 2016 by private Cayman Islands-registered hedge fund Worldview, said February 16 it has filed a criminal complaint against its former Bulgaria manager David Archer and others.

Its statement did say not where the criminal complaint had been lodged, and a spokesperson was not able to provide this info when contacted by NGW. 

Petroceltic’s new owners say they believe it was defrauded of several million US dollars over several years. The complaint focuses on the alleged improper syphoning of money out of Petroceltic’s Bulgarian operations through a series of fraudulent transactions with related party companies controlled by Archer and associates.

Petroceltic said overpriced transactions concerned invoicing related to construction and maintenance contracts; vehicle, vessels and office rentals; and transactions involving the sale of gas at a significant discount to market price to entities controlled by Archer which was then allegedly onsold on the open market at much higher prices. The company said Archer and his co-conspirators’ alleged actions spanned the UK, Bulgaria, Malta and Egypt.

Petroceltic's Black Sea interests offshore Bulgaria (Map credit: Petroceltic)

Petroceltic has a 100% operated interest in the Galata, Kaliakra and Kavarna producing gas fields – which averaged 18.6mn ft³/d during 2014 – and one future development, all in the shallow water Galata Exploration Block offshore Bulgaria. The firm also has operations in Algeria (38.25% equity in Ain Tsila gas development), Egypt and Italy.

The company's accusations are both grave and highly surprising, given David Archer's 40-year experience with the likes of BP, Texaco and Melrose – at the latter he became Bulgaria manager in charge of the Galata gas field's development, then Melrose's board level operations director. He was awarded the OBE in 2002 for services to British industry and foreign investment. They may also attract attention to Petroceltic's unconventional business culture.

Petroceltic said it is also conducting an internal investigation on the level of knowledge former management had regarding the activities alleged in the complaint. Worldview's takeover of Petroceltic was hostile until it purchased the majority of its debt, at which point Petroceltic's former management realised they had no choice but to recommend acceptance of its 3p/share offer which they had previously argued was undervalued.


Mark Smedley