Algeria’s state-owned energy company Sonatrach announced a $5.4 billion contract with Saudi Arabia’s Midad Energy on Monday.
The agreement covers oil and gas exploration and development in the Illizi Basin.
The production-sharing contract spans 30 years, with an option to extend for another 10 years, and includes a seven-year exploration phase.
Midad Energy North Africa will fully fund the investment, including $288 million earmarked for exploration.
The Illizi South perimeter is located about 100 kilometers south of the Algerian town of In Amenas, near the Libyan border.
According to Reuters, the deal was first reported by Ennahar TV and is expected to substantially enhance Algeria’s energy output.
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By the end of the contract period, total production is estimated to reach around 993 million barrels of oil equivalent, including 125 billion cubic meters of natural gas, according to Saudi state news agency SPA.
Sonatrach, Algeria’s largest oil and gas producer, has been actively seeking foreign partnerships to boost production and modernize its infrastructure.
The company recently signed an $850 million contract with China’s Sinopec for hydrocarbon exploration and development.
Earlier this month, Algeria’s energy minister announced plans to invest $60 billion in the country’s energy sector over the next five years, focusing on upstream exploration and production.
The North African nation, a member of the Organization of the Petroleum Exporting Countries (OPEC), aims to strengthen its role as a major supplier of energy to global markets while meeting domestic demand and progressing toward more sustainable energy sources.
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Image Credit: Reuters
