Algerian national oil company Sonatrach has signed a production-sharing contract with Midad Energy North Africa for the development of the Illizi South perimeter, located approximately 100 kilometres south of In Amenas. The agreement was signed at Sonatrach’s headquarters by the company’s Chairman and Chief Executive Officer Rachid Hachichi and the Chairman and CEO of Midad Energy North Africa, Sheikh Abdulelah Bin Mohammed Bin Abdullah Al-Aiban.
The contract is established under Algeria’s Hydrocarbon Law No. 19-13 and spans an initial duration of 30 years, with the possibility of a 10-year extension. It includes a seven-year research phase, incorporated within the first contractual period. The full funding, amounting to $5.4bn—of which $288mn is allocated to research operations—will be provided by the Saudi partner Midad Energy North Africa.
Estimated output of 993 million barrels of oil equivalent
The expected output over the full contractual period is estimated at 993 million barrels of oil equivalent (boe), including 125 billion cubic metres of gas intended for commercialisation, 103 million barrels of liquefied petroleum gas (LPG) and 101 million barrels of condensate. This volume represents a significant contribution to Algeria’s export capacity and reaffirms the strategic value of the Illizi basin in regional supply.
The signing ceremony was attended by Minister of Energy and Mines Mohamed Arkab, the Ambassador of the Kingdom of Saudi Arabia to Algeria, Dr. Abdullah bin Nasser Abdullah Al-Busairi, as well as representatives from Algeria’s key regulatory bodies, including the National Agency for the Valorisation of Hydrocarbon Resources (ALNAFT) and the Hydrocarbon Regulatory Authority (ARH).
Regulatory compliance and priority for local content
The contract includes the deployment of advanced technological and digital solutions for exploration and exploitation of the area. The programme will be implemented in line with Algeria’s current environmental regulatory requirements. Priority will be given to subcontracting with national suppliers, in accordance with the local content framework defined by Algerian law.
This partnership follows a memorandum of understanding signed between the two companies on March 3, 2024, and reflects Sonatrach’s strategy of strengthening ties with Gulf-based operators in key areas of southeastern Algeria.
