Algerian-Saudi $5.4B Hydrocarbons Project
The Algerian Sonatrach Group signed a partnership agreement on Monday with Saudi Midad Energy North Africa to explore and exploit hydrocarbons in the Illizi area of southern Algeria.
This Contract, signed under the aegis of the hydrocarbon Law n°19-13, is of a duration of 30 years, which can be extended for 10 additional years and provides for a research period of 7 years.
Sonatrach CEO Rachid Hachichi said that the overall investments projected for the exploration and exploitation of this area will be 100% funded by the partner Midad Energy North Africa for a total amount of around US$5.4 billion, including US$288 million allocated to research investments. He added that this project is assigned to Algerian institutions, strengthening their role in the entire hydrocarbon value chain.
Sonatrach published a press release, published on its website, that this hydrocarbon contract was signed by the group’s Chairman and CEO Rachid Hachichi and the Chairman & CEO of Midad Energy North Africa, Sheikh Abdulelah Bin Mohammed Bin Abdullah AL-AIBAN, in the presence of the Minister of State, Minister of Hydrocarbons and Mines, Mohamed Arkab, the Ambassador of Kingdom of Saudi Arabia to Algeria, Dr. Abdullah bin Nasser Abdullah Al-Busairi, and also the President of the Managing Committee of the National Agency for the Valorization of Hydrocarbons Resources « ALNAFT» and the Chairman of the Hydrocarbon Regulatory Authority « ARH».
Sonatrach explains that the program relating to this hydrocarbon contract will be carried out according to strict compliance with the environmental requirements of the regulation in force applicable in Algeria, adding that it also includes the use of the latest technological and digital solutions. Furthermore, calling on Local Content and subcontracting with a national supplier under the execution of this contract will be prioritised.
Sonatrach and Medad aim to achieve a total production, under the exploitation of the Illizi perimeter, at the end of the contractual period, of 933 million barrels of oil equivalent, including 125 billion cubic meters of gas for marketing and 204 million barrels of liquid fuels, distributed among 103 million barrels of liquefied petroleum gas and 101 million barrels of condensates. Showing clear indicators that reflect the importance of this project.
During the project’s implementation, Hachichi said, strict compliance with environmental protection requirements will be achieved, and the latest technological and digital solutions in the petroleum industry will be utilised, ensuring the highest standards of efficiency and quality.
Sonatrach reminded that the signing of this hydrocarbons contract marks the successful outcome of works on the Protocol of Agreement concluded between the group and Midad Energy North Africa on March 3, 2024.