Key Takeaways
- Algeria approved the $5.4 billion Illizi South hydrocarbon project, partnering with Midad Energy to exploit oil and gas resources.
- The project operates under a 30-year production-sharing contract, with an option to extend for 10 more years.
- Exploration activities may last up to seven years, focusing on seismic surveys and drilling.
- The project aims to produce about 993 million barrels of oil equivalent and boost Algeria’s energy output.
- Algeria plans to invest $60 billion in its energy sector from 2025 to 2029, with the Illizi South project being crucial for long-term resource development.
Algeria has given the green light to the Illizi South hydrocarbon project, a major $5.4 billion development. The project brings together Sonatrach and Saudi-based Midad Energy. It will focus on exploring and developing oil and gas resources in the southeastern part of the country, close to the Libyan border. The deal is set up under a long-term production-sharing agreement.
Investment and Contract Details of Illizi South Hydrocarbon Project
The project will run under a production-sharing contract that spans 30 years, with the option to extend it by another 10 years. Midad Energy will cover the full cost of the investment. Out of the total $5.4 billion budget, about $288 million is set aside for the exploration phase.
Exploration and Development Activities
Exploration work is expected to take up to seven years. This stage will include seismic surveys and drilling to assess the area’s potential. The site lies roughly 100 kilometers south of In Amenas, a region already known for its hydrocarbon resources. The overall plan covers everything from initial exploration to full-scale production.
Production Capacity and Resource Estimates
Over its lifetime, the project is expected to produce around 993 million barrels of oil equivalent. This includes about 125 billion cubic meters of natural gas, along with condensates and liquefied petroleum gas. The goal is to boost Algeria’s overall energy output.
Role of Sonatrach and Energy Strategy
Sonatrach, Algeria’s state-owned energy company, is leading the project. The company continues to work with international partners to expand production capacity. This project reflects Algeria’s broader push to strengthen its upstream oil and gas sector through foreign collaboration.
Long-Term Energy Investment Plans
Looking ahead, Algeria plans to invest around $60 billion in its energy sector between 2025 and 2029. Most of this funding will go toward exploration and production. The Illizi South hydrocarbon project is a key part of that plan, supporting long-term resource development and stable energy supply.
