The state-owned oil company of Algeria, Sonatrach, has signed an agreement with Italy’s Eni to jointly explore and develop the contractual perimeter of Zemoul El Kbar in the Berkine Basin in Algeria, according to a press statement released by Sonatrach on Monday.
The production sharing contract formally concludes the Head of Agreement that was entered into between Sonatrach and Eni in May 2024.
According to the press release from Sonatrach and seen by Energy in Africa, total investments required for exploration and development within the Zemoul El Kbar acreage—about 300 km east of Hassi Messaoud—are estimated at $1.35 billion.
The agreement was concluded under Hydrocarbon Law No.19-13 and is valid for an extendable 30-year period, which includes a 7-year research phase.
Details of the project
Research activities will receive $110 million from the total project budget.
The total estimated volume of hydrocarbons from the project stands at 415 million barrels of oil equivalent, including 9.3 billion cubic meters of natural gas over the contract duration.
“The works schedule relating to this hydrocarbon contract includes recourse to innovative technological processes, integrating the latest digital solutions pertaining to operating, the use of new technologies of production optimization and reserves recovery,” the statement reads.
Eni and Sonatrach also signed a gas agreement, though its details remain undisclosed.
Algeria holds Africa’s second-largest proven natural gas reserves, after Nigeria.
In 2024, the country recorded a significant drop in LNG exports due to extended maintenance at several key gas-producing fields.
However, the government is launching several measures to ramp up upstream activities to boost hydrocarbon output, including this Zemoul El Kbar project.
Local content provisions are emphasized in the project’s agreement.
“Recourse to local content and subcontracting of national suppliers is privileged, within the frame of this contract,” Sonatrach stated.
Eni’s growing footprint in Algeria
The Italian energy company Eni has a long-standing and growing presence in Algeria’s oil and gas sector.
In 2023, it acquired BP’s assets in Algeria, including the gas-producing “In Amenas” and “In Salah” concessions.
Earlier on, Eni announced plans to invest up to $9 billion each in Algeria, Libya, and Egypt over the next four years to expand production.
In the recently concluded Algerian licensing round, Eni was awarded a license to explore and develop the Reggane II block, alongside Thailand’s PTTEP.
