Algeria has inked a $5.4 billion oil and gas contract with Saudi-based Midad Energy in the Illizi South block. The contract was signed between Midad Energy and Algeria’s national oil and gas company Sonatrach. The contract’s scope entails a hydrocarbons exploration and production sharing agreement. The agreement is valued at $5.4bn and has a duration of 30 years. Moreover, it has the option to be extended for an additional 10 years, according to a statement by Sonatrach.
This contract was signed by Sonatrach CEO Rachid Hachichi and the CEO of Midad Energy North Africa, Sheikh Abdelilah Ben Mohamed Ben Abdellah Al-Aiban. It was signed at Sonatrach’s headquarters in Algiers. The investments for exploration and exploitation of the block will be financed entirely by Midad Energy. Moreover, the investment includes a $288m allocated for research investments. The project is located about 100 kilometres south of In Amenas. Algeria is keen on improving its oil and gas production with projects such as the Algeria gas field project, one of the world’s largest, taking shape.
The Scope of Implementation on Algeria’s Oil and Gas Contract with Midad Energy
Algeria oil and gas contract with Midad Energy on the $5.4 billion project has a reach period seven years. It was also signed within the framework of Algeria’s Law 19-13 for hydrocarbons, which came into effect in December 2019. In a statement, Sonatrach noted that the work programme associated with the contract will be implemented in strict compliance with environmental protection requirements. Moreover, it will be managed in accordance with applicable Algerian regulations. “This programme also includes the use of the latest technological and digital solutions,” it added.
Projected production from the Illizi South offshore development by the end of the contractual period is estimated at 993 million barrels of oil equivalent. Furthermore, it includes 125 billion cubic meters of marketable gas and 204 million barrels of liquid fuels. The expected 204 million barrels of liquid fuels includes 103 million barrels of liquefied petroleum gas (LPG). It also includes 101 million barrels of condensates. The latest contract signed by Sonatrach and Midad Energy follows on from an agreement protocol concluded between the two companies on 3 March 2024.
