Saudi Arabia’s Midad Energy North Africa has signed a $5.4 billion hydrocarbons exploration and production contract with Algeria’s Sonatrach, marking one of the largest Saudi private-sector energy investments in North Africa to date.
The agreement, signed in Algiers in the presence of Saudi Ambassador to Algeria Dr Abdullah bin Nasser Al-Busairi, covers exploration and development in the Illizi Basin, around 100km south of In Amenas.
Midad Energy will finance 100 per cent of the project, including $288m allocated for exploration and research activities.
Saudi and Algeria investment
The 30-year production-sharing contract, extendable by an additional ten years, includes a seven-year exploration phase.
The partnership operates under Hydrocarbon Law No. 19-13, and was concluded following a protocol of agreement signed between Sonatrach and Midad Energy North Africa on March 3, 2024.
By the end of the contract period, the Illizi South perimeter is expected to produce 993 million barrels of oil equivalent, including 125 billion cubic metres of natural gas and 204 million barrels of liquid hydrocarbons—comprising 103 million barrels of LPG and 101 million barrels of condensate.
Environmental regulations
According to Sonatrach, the programme will comply strictly with Algeria’s environmental regulations, utilise advanced digital and technological solutions, and prioritise local content and national subcontracting in its execution.
Officials described the deal as the successful outcome of technical and commercial discussions that began with the March 2024 protocol, positioning the Saudi-Algerian partnership as a model for regional energy cooperation and cross-investment.
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