Algeria’s state hydrocarbon company Sonatrach has signed a $1.35 billion production sharing agreement with Italy’s Eni, marking a significant investment in North African energy infrastructure development.
The 30-year contract covers exploration and exploitation of the Zemoul El Kbar area in the Berkine Basin, located 300 kilometers east of Hassi Messaoud. The agreement includes provisions for a 10-year extension, demonstrating long-term commitment to resource development.
Total planned investments reach approximately $1.35 billion, with $110 million allocated specifically for exploration and research activities. The contract aims to recover 415 million barrels of oil equivalent, including 9.3 billion cubic meters of natural gas.
Sonatrach CEO Rachid Hachichi described the partnership as “a qualitative step enabling the use of latest digital solutions and innovative technologies in exploration and production.” These advances should improve well productivity and enhance reserve recovery rates.
The agreement leverages Eni’s extensive experience in Algeria, where the Italian company has operated since 1981. Eni manages the TransMed gas pipeline with Sonatrach, connecting Algeria to Italy via Tunisia and demonstrating successful long-term collaboration.
Algeria maintains its position as Africa’s largest natural gas exporter and the world’s seventh largest, making partnerships like this crucial for maintaining competitive advantages in global energy markets.
The investment timing aligns with growing European demand for diversified energy sources, particularly following geopolitical developments affecting traditional supply chains. Algeria’s strategic location and established infrastructure provide significant advantages.
Economic analysts project that successful development of the Zemoul El Kbar area could create thousands of jobs and generate substantial revenues for the Algerian government. These funds could support broader economic diversification efforts.
The partnership demonstrates how international collaboration can unlock Africa’s energy potential while providing expertise and technology transfer. Success in this venture could encourage similar investments across the continent.
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