Midad Energy signs $5.4 billion agreement with Sonatrach to develop Illizi South Field.

Algiers – Algeria’s state-owned oil and gas company Sonatrach has officially signed a $5.4 billion production-sharing agreement with Saudi Arabia’s Midad Energy, marking one of the largest foreign investment deals in the country’s energy sector in recent years.

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The agreement covers the exploration and production of hydrocarbons in the El Eulizi basin located in southern Algeria. It will extend for 30 years, with an optional 10-year extension, and includes an initial exploration phase of seven years.

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Under the terms of the deal, Midad Energy will fully finance the investment, including $288 million dedicated to exploration and appraisal operations. By the end of the contractual term, the project is expected to yield approximately 993 million barrels of oil equivalent, including about 125 billion cubic meters of natural gas intended for marketing.

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The signing ceremony was attended by Algeria’s Minister of Energy and Mines, Mohamed Arkab, and Saudi Ambassador to Algeria, Abdullah Al Bassiri, alongside senior executives from both companies.

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Sonatrach described the agreement as a strategic milestone that strengthens Algeria’s partnership with Saudi Arabia and contributes to enhancing the country’s energy production capacity and investment attractiveness.

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The deal follows a memorandum of understanding signed in March 2024 between Sonatrach and Midad Energy North Africa, laying the groundwork for this major cooperation.

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This partnership underscores Algeria’s ongoing efforts to expand its hydrocarbon resources and consolidate its position as a key global energy supplier while fostering stronger economic ties with Saudi Arabia.