- The agreement includes an investment of up to $850 million and builds upon an MOU signed between Sonatrach and Sinopec in March 2024.
- The deal aims to enhance exploration, production efficiency, and hydrocarbon recovery rates in key Algerian energy zones.
In a significant move to boost its energy sector, Algeria’s national oil company, Sonatrach, signed a hydrocarbon production-sharing agreement last week. The deal, signed with Chinese integrated energy firm Sinopec, is centred on the Hassi Berkane Nord project.
Sonatrach and Sinopec will collaborate on research and assessment programs to enhance and develop hydrocarbon resources in the region between the wilayas of Ouargla and El Meniaa.
The deal aligns with ongoing efforts to strengthen Sonatrach and Sinopec’s existing partnership on exploration and improving oil and gas recovery rates.
The deal aims to enhance exploration, production efficiency, and hydrocarbon recovery rates in key Algerian energy zones. It follows a Memorandum of Understanding (MoU) signed in March 2024, further solidifying long-term cooperation between the two energy powerhouses.
The agreement, valued at $850 million, will focus on research, assessment, and the development of hydrocarbon resources between the wilayas of Ouargla and El Meniaa, a region critical to Algeria’s oil and gas output.
Both firms hope to enhance production levels by tapping into these reserves while leveraging advanced exploration technologies.
China’s involvement in Algeria’s energy sector is not new, but this latest investment underscores its commitment to deepening its presence in North Africa. Sinopec, one of China’s largest oil and gas firms, continues to expand its international footprint, particularly in resource-rich African nations.
The deal marks another milestone for Algeria’s ongoing strategy to modernise its oil and gas sector while attracting foreign investment to sustain production levels. Sonatrach has been actively seeking partnerships to optimise recovery rates and boost output efficiency in the face of fluctuating global oil prices and the transition toward cleaner energy solutions.
The collaboration aligns with China’s broader Belt and Road Initiative (BRI), which has seen Beijing invest heavily in Africa’s infrastructure and energy sectors. As one of Africa’s top gas producers, Algeria remains a strategic partner for China, offering energy security and investment opportunities.
With global energy demand shifting, the Sonatrach-Sinopec partnership could play a key role in stabilising Algeria’s oil production, particularly as Europe looks for alternative gas supplies amid ongoing geopolitical tensions.
The investment is also expected to create jobs, boost technological transfer, and strengthen Algeria’s economic ties with China. As Algeria looks to diversify its economy and optimise its natural resources, such agreements will be instrumental in maintaining its position as a leading energy supplier in the region.
The deal with Sinopec is not just a business agreement; it represents Algeria’s broader ambition to secure its energy future and expand international partnerships in a rapidly evolving global energy market.