Algeria's council of ministers has approved the exit of the UK's Gulf Keystone Petroleum from the Hassi Ba Hamou gas project in central Algeria, allowing the UK's BG Group and state-owned Sonatrach to increase their stakes in the project.
In February 2010, an agreement was reached between Gulf Keystone and BG for the transfer of Gulf Keystone's 38.25% interest in the Hassi Ba Hamou permit to its partners.
But the agreement was delayed as it awaited approval from Sonatrach and the Algerian government.
According to a statement from the council of ministers, BG now holds 65% in the Hassi Ba Hamou project, up from 36.75%.
Sonatrach, which held a 25% stake, now has 35%, the council said. "Gulf Keystone no longer has a stake in the Hassi Ba Hamou project," it said.
Last month, Algeria's oil minister Youcef Yousfi slammed a report that BG was considering leaving the North African country because of the delay over the Hassi Ba Hamou project.
A report in the Algerian online daily Tout sur l'Algerie said BG was preparing to leave Algeria in December this year having failed to reach agreement with Sonatrach on terms of the development of Hassi Ba Hamou.
In June 2008, BG together with Sonatrach and Gulf Keystone made a gas discovery at Hassi Ba Hamou, and said they would discuss how to move to phase 2 of the project.
Gulf Keystone subsequently said it wanted to leave the project to focus on its giant oil finds in the northern Iraqi region of Kurdistan.
