Algeria’s state-owned energy company Sonatrach said it signed a contract worth around US$5.4 billion with Saudi Arabia’s Midad Energy for oil and gas exploration and development in Algeria’s Illizi Basin.
The production-sharing contract spans 30 years with an option to extend for an additional 10 years and includes a seven-year exploration period.
Midad Energy North Africa will fully fund the investment, including US$288 million allocated to exploration. The Illizi South perimeter lies about 100 km (62 miles) south of the Algerian town of In Amenas, near the Libyan border.
Overall production by the end of the contractual period is estimated to reach around 993 million barrels of oil equivalent, including 125 billion cubic meters of natural gas.
Sonatrach is Algeria’s largest oil and gas producer and has been actively seeking foreign partnerships to boost output and modernise infrastructure.
The company has previously signed deals with international partners, including a recent US$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 US$60 billion in its energy sector over the next five years, with a focus on upstream exploration and production.
The North African nation, a member of the Organization of the Petroleum Exporting Countries, aims to strengthen its role as a key supplier of energy to international markets while meeting domestic demand and making a transition to more sustainable sources.
