Algeria Officially Approves Major Oil and Gas Exploitation Agreement
By presidential decree, Algeria has officially approved a large-scale oil and gas exploitation agreement, sending a strong signal to the entire region.
The Contract is Signed, Published, and Enforceable
On March 8, 2026, President Abdelmadjid Tebboune officially approved a hydrocarbon agreement worth $5.4 billion, covering the exploration and exploitation of the Illizi Sud perimeter in the Algerian Sahara. This is not an announcement, but a done deal, recorded in the Official Journal of the Algerian Republic.
An Agreement Born in October 2025, Ratified in March 2026
Everything began on October 13, 2025, when Sonatrach and Midad Energy North Africa B.V. signed a hydrocarbon contract in Algiers. Five months later, Presidential Decree No. 26-113 gave it the force of law. The legal basis for this agreement is Law 19-13, designed to attract foreign investors, secure long-term commitments, and provide a stable, readable, and predictable framework. This is exactly what international partners demand before engaging.
30 Years of Exploitation: A Bet on the Future
The contract duration is set at 30 years, with the possibility of a 10-year extension. The exploration phase will last 7 years. For this first stage, $288 million is dedicated to research and drilling. The foreign partner assumes the majority of the financial risk, while Sonatrach provides the land, framework, and expertise. This sharing model protects Algerian public finances while attracting capital.
Nearly a Billion Barrels Expected Under the Desert
Estimates are staggering. The total production volume expected over the contract period exceeds 993 million barrels of oil equivalent. The field contains natural gas, condensate, and LPG. 125 billion cubic meters of natural gas are intended for commercialization, complemented by over 200 million barrels of liquids. Illizi Sud is no ordinary project; it's a strategic reservoir that will supply markets for decades.
Key Facts
- Contract value: $5.4 billion
- Contract duration: 30 years, with a possible 10-year extension
- Exploration phase: 7 years
- Initial investment: $288 million
- Expected production: over 993 million barrels of oil equivalent
- Natural gas reserves: 125 billion cubic meters
- Liquids reserves: over 200 million barrels
