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Algeria's state-owned energy firm Sonatrach and Italian oil and gas company Eni have signed a production-sharing agreement worth $1.35 billion to jointly explore and develop natural gas reserves in southeastern Algeria.
The contract, signed at Sonatrach's headquarters in Hydra, Algiers, outlines a 30-year framework for the exploration and exploitation of hydrocarbons in the Zemoul el Kbar field, located in the Berkine Basin, approximately 300 kilometers east of Hassi Messaoud. The initial term includes a seven-year exploration phase and may be extended by an additional decade.
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The joint development is expected to yield up to 415 million barrels of oil equivalent, including 9.3 billion cubic meters of natural gas, over the full contractual period.
According to Sonatrach, $110 million will be dedicated to exploration, while the remaining $1.24 billion will be used for field development. The investment will be divided between the two parties, with Italy contributing $1.01 billion and Algeria providing $337 million.
Rachid Hachichi, CEO of Sonatrach, said the project marks a strategic shift by incorporating advanced digital solutions and modern extraction technologies aimed at enhancing well productivity and improving recovery rates. He described the agreement as a "qualitative step" in Sonatrach’s development strategy.
Claudio Descalzi, CEO of Eni, emphasized that the deal reflects the depth of bilateral cooperation between Algeria and Italy, citing Sonatrach as one of the world’s leading partners in international energy investment.
Eni has been active in Algeria since 1981 and co-manages the TransMed pipeline with Sonatrach, delivering Algerian gas to Italy via Tunisia. Algeria remains the largest exporter of natural gas in Africa and ranks as the seventh largest globally.
In 2024, European Union countries imported 39.19 billion cubic meters (bcm) of natural gas from Algeria, accounting for 14.4% of the bloc’s total gas imports. Italy is also among the top three EU importers of Algerian LNG, the European Council reported.
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