SONATRACH, Algeria’s national oil company, has signed a $5.4 billion hydrocarbon-sharing agreement with Saudi Arabia’s Midad Energy North Africa to explore and develop the Illizi South area in southeastern Algeria.
The deal, signed on October 13, marks a major step in strengthening Algerian–Saudi energy cooperation and will be fully funded by Midad Energy, which has allocated $288 million for initial exploration. The contract area lies about 100 kilometers south of In Amenas, a key hub for Algeria’s hydrocarbon industry.
Spanning 30 years with an option for a 10-year extension, the agreement includes a seven-year research phase. Upon completion, the Illizi South development is expected to produce around 993 million barrels of oil equivalent (mmboe) — including 125 billion cubic meters of natural gas and 204 million barrels of liquid hydrocarbons (split evenly between liquefied petroleum gas and condensates).
The exploration and development program will deploy advanced digital and technological solutions, ensuring compliance with Algeria’s strict environmental standards.
This contract follows a Memorandum of Understanding (MoU) signed between SONATRACH and Midad Energy in March 2024, aimed at accelerating gas field development and investment in Algeria’s southern basins.