Algeria’s state-owned oil company Sonatrach and Italy’s Eni have signed a 30-year production sharing contract (PSC) valued at $1.35 billion to explore and develop the Zemoul El Kbar region, located around 300 km southeast of Hassi Messaoud. The agreement covers approximately 4,200 sq km, consolidating neighboring assets previously managed under separate contracts.

Contract Details

The deal was formalized in Algiers, witnessed by Energy Minister Mohamed Arkab, Sonatrach CEO Rachid Hachichi, and Sonelgaz CEO Mourad Adjal. Structured under Algeria’s Law no. 19-13, the PSC aims to maximize asset value through joint exploration, development, and production operations.

Partnership and Future Outlook

Eni and Sonatrach plan to deploy enhanced recovery technologies and integrate operations using existing facilities. The partners also discussed expanding collaboration in gas production, LNG exports, renewable energy, hydrogen, and a power interconnector linking Algeria with Europe. Eni, active in Algeria since 1981, reported equity production of 137,000 boed in 2024.

Strategic Context

This deal follows Eni’s award of the Reggane II block (in partnership with PTTEP) during Algeria’s 2024 Bid Round, reinforcing Eni's and Sonatrach’s strategic role in driving energy security and regional development.

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