SONATRACH, the Algerian national oil company (NOC), and the Saudi Midad Energy North Africa signed a $5.4 billion hydrocarbon-sharing contract for the exploration and development of the Illizi South area in Algeria.

The agreement, signed on October 13, strengthens Algerian-Saudi energy cooperation and is fully funded by Midad Energy. The company has dedicated $288 million  specifically for initial exploration activities. The contractual area is located about 100 kilometers south of In Amenas.

The contract has a term of 30 years, with an option for a 10-year extension, and includes a seven-year research period.

Upon completion of the contract, the Illizi South perimeter is expected to yield substantial production, reaching 993 million barrels of oil equivalent (mmboe). This production is broken down into 125 billion cubic meters (bcm) of gas for marketing and 204 million barrels of liquid hydrocarbons, which include 103 million barrels of liquified petroleum gas (LPG) and 101million barrels of condensate.

The exploration and development program will utilize cutting-edge technological and digital solutions while adhering strictly to Algeria’s environmental regulations. The agreement follows a Memorandum of Understanding (MoU) signed by SONATRACH and Midad Energy North Africa in March 2024 to explore and fast-track the development of gas fields in the region.