Algeria’s state-owned hydrocarbon company Sonatrach and Italian energy major Eni formalized a production sharing contract on Monday valued at $1.35 billion, aimed at the exploration and development of hydrocarbons in southeastern Algeria.
The 30-year agreement specifically covers the Zemoul El Kbar contract area within the Berkine Basin, situated approximately 300 kilometers east of Hassi Messaoud. According to a statement released by the Algerian group, this landmark contract can be extended for an additional 10 years and includes an initial seven-year period dedicated to exploration and research activities.
The total planned investments for both exploration and exploitation in this strategic area are approximately $1.35 billion, with $110 million specifically earmarked for research and exploration. The overarching objective of the contract is to recover an estimated “415 million barrels of oil equivalent (BOE), including 9.3 billion cubic meters of natural gas over the entire contractual period.”
Rachid Hachichi, CEO of Sonatrach, as quoted by the official APS agency, hailed the agreement as “a qualitative step that will enable the use of the latest digital solutions and innovative technologies in the fields of exploration and production, improve well productivity, and recover reserves.” This underscores a commitment to modernizing and optimizing hydrocarbon extraction processes.
Eni has maintained a presence in Algeria since 1981, notably managing the TransMed gas pipeline with Sonatrach, which serves as a vital conduit connecting Algeria to Italy via Tunisia. Algeria stands as Africa’s largest natural gas exporter and is ranked among the world’s top seven global exporters of natural gas. This new agreement further solidifies the long-standing partnership between Sonatrach and Eni, bolstering Algeria’s significant role in the international energy market.
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