Algeria’s state-owned energy company Sonatrach announced on that it has signed a production-sharing contract worth around $5.4 billion with Saudi Arabia’s Midad Energy for the exploration and development of oil and gas resources in the Illizi Basin. The agreement covers 30 years and comes with an option to extend for another 10 years. It also includes a seven-year period for exploration.
Midad Energy North Africa will finance the entire investment, allocating $288 million specifically for exploration activities. The Illizi South perimeter, the focus of the project, is located roughly 100 km (62 miles) south of the Algerian town of In Amenas, near the border with Libya.
Saudi state news agency SPA reported that the contract is expected to yield an overall production of about 993 million barrels of oil equivalent by the end of the contractual period, including 125 billion cubic meters of natural gas. Sonatrach, Algeria’s largest oil and gas producer, has been working with international partners to boost output and update its infrastructure. One of its recent deals is an $850 million contract with China’s Sinopec for hydrocarbon development and exploration.
Earlier this month, Algeria’s energy minister said the country plans to invest $60 billion in its energy sector over the next five years, focusing on upstream exploration and production. Algeria is striving to hold its position as a leading supplier to global energy markets as a member of the Organization of the Petroleum Exporting Countries, while also meeting domestic energy needs. The country is adopting greener energy practices, aiming to maintain current production while safeguarding long-term energy security and environmental goals.