Spanish energy company Iberdrola, which has a 22 per cent holding in exploration company Petroceltic, has entered discussions with the Irish company about exercising an option to buy a stake in Petroceltic’s Ain Tsila Ridge in Algeria before the middle of next year.

Iberdrola invested $55 million in Petroceltic in June 2008 where it holds a 22.64 per cent stake.

Under the terms of that agreement, Iberdrola acquired the option to acquire a 49.9 per cent financing interest in any single asset in Petroceltic’s existing portfolio for an additional sum of $55 million. That option is due to expire in mid-2010.

A spokesman for Petroceltic confirmed yesterday Iberdrola is in discussions with the Irish company about exercising its option over the Ain Tsila Ridge for a sum of $75 million, before the option runs out next year.