Algeria’s state-owned Sonatrach announced a $5.4 billion contract with Saudi Arabia’s Midad Energy North Africa on October 13, 2025. The agreement targets oil and gas exploration in the Illizi Basin.
30-Year Production Sharing
The deal spans 30 years, with a possible 10-year extension. It features a seven-year exploration phase. Thus, the Algeria-Saudi energy deal ensures long-term development.
Full Funding by Midad
Midad Energy North Africa will cover all investments. This includes $288 million for exploration. The Algeria-Saudi energy deal reduces financial risks for Sonatrach.
Strategic Location
The Illizi South perimeter lies 100 km south of In Amenas, near the Libyan border. This positioning enhances the Algeria-Saudi energy deal’s potential.
Sonatrach’s Partnership Push
Sonatrach seeks foreign collaborations to increase output. The Algeria-Saudi energy deal fits this strategy, modernizing infrastructure and boosting reserves.
Recent Similar Agreements
Sonatrach recently inked an $850 million deal with China’s Sinopec for hydrocarbon projects. This complements the Algeria-Saudi energy deal’s goals.
Energy Investment Plans
Algeria plans $60 billion in energy investments over five years. The focus is upstream exploration. The Algeria-Saudi energy deal supports this ambition.
OPEC Member’s Role
As an OPEC member, Algeria aims to supply global markets. The Algeria-Saudi energy deal strengthens its position while meeting domestic needs.
Sustainable Energy Transition
The agreement aligns with Algeria’s shift to cleaner sources. The Algeria-Saudi energy deal balances production with environmental goals.
Future Production Boost
The Illizi Basin project could add significant capacity. The Algeria-Saudi energy deal promises economic growth and energy security in 2025.
Regional Cooperation
The partnership highlights Saudi-Algerian ties. The Algeria-Saudi energy deal fosters collaboration in the North African energy sector.
Economic Impact
The $5.4 billion investment creates jobs and revenue. The Algeria-Saudi energy deal drives development in the Illizi region.
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