Sonatrach, Midad sign $5.4 billion hydrocarbon deal in Algeria’s Illizi basin
ALGIERS (WO) — Sonatrach has signed a $5.4 billion production-sharing agreement with Midad Energy North Africa, a subsidiary of Saudi Arabia’s Midad Energy, for exploration and development across the Illizi South perimeter in southeast Algeria.
The 30-year contract, signed under Algeria’s hydrocarbon law no. 19-13, includes a seven-year exploration phase and allows for a 10-year extension. Midad Energy will fund 100% of the investment, including $288 million for exploration, Sonatrach said.
The project area lies about 100 km (62 miles) south of In Amenas and is expected to yield 993 million boe over the life of the contract — including 125 Bcm of gas and 204 million barrels of liquids (103 million barrels of LPG and 101 million barrels of condensate).
“This contract marks a new phase of cooperation between Algeria and Saudi Arabia in the energy sector,” said Sonatrach CEO Rachid Hachichi, during the signing ceremony attended by Algerian Energy Minister Mohamed Arkab and Saudi Ambassador Dr. Abdullah bin Nasser Al-Busairi.
Sonatrach said the program will follow environmental regulations and use advanced digital technologies, while giving priority to local content and subcontracting with Algerian suppliers.
The signing follows a protocol agreement reached between the two companies in March 2024, marking one of Algeria’s largest upstream partnerships in recent years.
