Algeria’s state energy company Sonatrach has signed a $5.4 billion agreement with Saudi Arabia’s Midad Energy to explore and develop oil and gas resources in the Illizi Basin, near the Libyan border.
The 30-year production-sharing deal includes an initial seven-year exploration phase and an option to extend operations for another decade. According to Reuters, Midad Energy North Africa will finance the entire investment, including $288 million dedicated to exploration work.
The Illizi South perimeter lies roughly 100 kilometers (62 miles) south of In Amenas, a key energy hub in southeastern Algeria. The agreement was first reported by local broadcaster Ennahar TV.
Major production targets
By the end of the contractual period, total production is expected to reach about 993 million barrels of oil equivalent. This figure includes roughly 125 billion cubic meters of natural gas, according to Saudi state news agency SPA.
Sonatrach, the largest oil and gas producer in Algeria, has been expanding its international partnerships to boost output and modernize its energy infrastructure. The company recently signed an $850 million hydrocarbon development deal with China’s Sinopec, continuing its push to attract foreign investment.
Expanding Algeria’s energy ambitions
Earlier this month, Algeria’s energy minister announced plans to invest $60 billion in the national energy sector over the next five years. The investment will focus on upstream exploration, production, and the gradual transition toward more sustainable energy sources.
A member of the Organization of the Petroleum Exporting Countries (OPEC), Algeria aims to strengthen its role as a reliable energy supplier to global markets while securing domestic demand.