Sonatrach, the state-owned energy firm of Algeria, announced on Monday that it has signed a deal with Midad Energy of Saudi Arabia for the exploration and production of oil and gas in the Illizi Basin of Algeria, valued at around $5.4 billion.
The production-sharing agreement comprises a seven-year exploration period and a 30-year term with a 10-year extension option.
The entire expenditure, including $288 million set aside for exploration, will be financed by Midad Energy North Africa.
The Illizi South perimeter is located close to the Libyan border, approximately 100 kilometers (62 miles) south of the Algerian town of In Amenas.
The biggest producer of gas and oil in Algeria, Sonatrach, has been aggressively looking for international alliances to increase production and update facilities.
The business has already signed agreements with foreign parties, such as the $850 million hydrocarbon development and exploration contract it recently signed with Sinopec of China.
Algeria plans to invest $60 billion in its energy sector over the next five years, with a focus on upstream exploration and production, according to the country’s energy minister, who announced this earlier this month.
As a member of the Organization of the Petroleum Exporting Countries (OPEC), the North African nation aims to meet domestic demand, transition to more sustainable sources, and strengthen its position as a major energy provider to global markets.
As a subsidiary of Alturki Holding in Saudi Arabia, Midad Energy has investments in upstream oil and gas operations as well as industrial and energy services.
