Italian Energy Giant Eni Strengthens its Presence in Algeria

Days after the visit of the Italian Foreign Minister, Luigi Di Maio, to Algeria, which focused on securing Rome’s needs of Algerian gas, the Italian energy giant ENI embarked on efforts to strengthen its presence as an investor in Algeria’s hydrocarbon sector.

The Italian giant is negotiating to buy assets for the British company BP in Algeria, according to the “Reuters”, and this is related to two major gas projects, in In Salah and In Amenas, in the south of the country.

According to the same source, the two companies are in advanced talks to demarcate this deal, while negotiations are still underway to agree on a way to balance the value of their assets in Angola because the Italian company’s operations and reserves of oil and gas are larger than those of its British counterpart.

Data issued by the two companies, according to the same source, indicate that the total assets of BP in the deal amounted to about $6.8 billion at the end of 2021, while those of Eni were worth $7.3 million.

Eni and Sonatrach have long-term gas contracts that embody the strength of historical relations, and last year a series of agreements were signed aiming to increase production, while Italy is seen as a future bridge to transport Algerian gas to Europe.

The Italian company aims to change the ownership of the two gas projects in southern Algeria, which will help the company to develop the infrastructure of the energy sector in Algeria, and then export larger quantities of gas to southern Europe through the gas pipeline that is in service, “Transmed” linking Algeria and Italy, and is currently transported Two-thirds of its estimated capacity of twenty billion cubic meters of gas, while it is expected to reach 32 billion cubic meters.

Italy is considered one of Algeria’s reliable partner countries, especially in the field of energy, and there has never been a dispute between them over contracts or prices, unlike the other two partners, France and Spain.

The Italian-Algerian memory preserves the friendly relations established by the friend of the liberation revolution, Enrico Mattei, whom the gas pipeline linking Algeria and Italy through Tunisia was named.

Rome is looking to increase gas imports from Algeria to help reduce its dependence on flows from the Russian company “Gazprom”, in the wake of the raging war between Russia and Ukraine, a task that the Italian Foreign Minister carried out on a previous visit to Algeria, and was on the table of talks with Algerian officials.

Previously, the Italian official returned to his country with promises from the Algerian authorities to contribute to raising Algeria’s gas exports to Italy, according to Sonatrach’s director, Toufik Hakkar, who confirmed the Algerian party’s commitment to ensuring its partners with would secure what they needed of gas, but within the limits of the possibilities available.

By acquiring BP’s assets in Algeria, the Italian giant hopes to raise the pace of production to match what Rome expects from Algeria, in a Western European context, aimed at reducing the dependence of the old continent’s countries on Russian gas, which is threatened to be dispensed with, due to the war in Ukraine.