Dubai-based Dragon Oil is planning an $800m bid for Irish oil company Petroceltic in order to boost its foothold in Algeria.

Dragon Oil has expressed its intention to offer 230 pence a share, according to a statement from Petroceltic released on 6 October.

The offer is 35 per cent higher than Petroceltic’s recent average stock price.

In the statement, Petroceltic said it is in “detailed discussions regarding a possible offer to be made by Dragon Oil”.

The offer still needs to be approved by Dragon Oil’s biggest shareholder.

Earlier this month, Dragon Oil won the Tinrhert and Msari Akabli blocks in consortium with the Italian energy company Enel.

Petroceltic’s Algeria assets include a stake in the Ain Tsila gas and condensate field in the east of the country. Its partners include Enel and state-owned operator Sonatrach.