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Saudi firm signs $5.4bn oil and gas contract in Algeria

15 October 2025

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Algeria's national oil and gas company Sonatrach and Saudi Arabia-based Midad Energy have signed a hydrocarbons exploration and production sharing agreement related to Algeria’s Illizi South block.

The agreement is valued at $5.4bn and has a duration of 30 years, with 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, at Sonatrach’s headquarters in Algiers.

The investments for exploration and exploitation of the block, which is located about 100 kilometres south of In Amenas, will be financed entirely by Midad Energy and include $288m allocated for research investments.

The contract has a research period of seven years and was singed within the framework of Algeria’s Law 19-13 for hydrocarbons, which came into effect in December 2019.

ALSO READ: Algeria makes provisional award for downstream project

In a statement, Sonatrach said: “The work programme associated with this contract will be implemented in strict compliance with environmental protection requirements and 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, including 125 billion cubic metres 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) and 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.

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Wil Crisp

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