Italian-based Eni has signed $1.35 billion to commence development in latest Algeria’s oil and gas deal. Algeria’s state-owned oil and gas company Sonatrach and the Italian company Eni have signed a production-sharing hdyrocarbons contract. The contract covers the exploration and exploitation of the Zemoul El-Kebir concession area. The region is located in the Berkine Basin, approximately 300 kilometers east of Hassi Messaoud. This is according to a statement by Sonatrach. The deal with Eni is the latest in a string of high-profile agreements that Sonatrach has announced.
The contract with Eni was signed under Hydrocarbons Law No 1913 and extends for a period of 30 years. Moreover, it included an extendable option for an additional 10 years. It also includes a seven-year exploration period. $110m of the estimated $1.35bn investment budget expected to be used in the exploration phase. In its statement, Sonatrach noted that the work programme associated with this contract includes the use of innovative technological methods. These include the latest digital solutions related to exploitation, in addition to the use of modern technologies to improve production and recover reserves.
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The Scope of Implementation on Algeria’s Oil and Gas Deal with Eni
The scope of implementation on Algeria’s oil and gas deal with Eni entails various conditions to ensure its success. “It is worth noting that, within the framework of implementing this contract, preference is given to the use of local content and the use of subcontracting services from national operators,” noted Sonatrach. Expected production from the area covered by the deal has been estimated at 415 million barrels of oil equivalent. Furthermore, it also includes 9.3 billion cubic meters of gas, over the contract period. The signing of the final PSC with Eni follows a provisional deal that was signed between Sonatrach and Eni on 19 May 2024. Apart from signing the PSC relating to the Zemoul El-Kebir concession area, other agreements were made.
The two parties also signed a gas agreement aimed at defining the terms of the hydrocarbons contract relating to the marketing of dry gas quantities from the operating area, intended for export. A framework agreement was also signed between Sonatrach and Eni Corporate University. The aim of the contract is to develop the skills of Sonatrach employees and transfer knowledge through the Eni Corporate University training institution. The scope is for a period of three years. The companies that were awarded blocks included France’s TotalEnergies, state-owned QatarEnergy, Eni and PTTEP of Thailand. The companies that were awarded blocks included France’s TotalEnergies, state-owned QatarEnergy, Eni and PTTEP of Thailand.
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