Algeria's state-owned energy giant, Sonatrach, has signed a landmark partnership agreement with Saudi Arabia's Madad company to explore and exploit hydrocarbons in the Illizi Basin, located in the southern Algerian Sahara. The 30-year contract, with the possibility of a 10-year extension, represents a significant investment of $5.4 billion in Algeria's vital energy sector.The agreement was formalized at a signing ceremony where Sonatrach’s CEO, Rachid Hachichi, revealed the total investment figure. He specified that Madad will be responsible for exploration and exploitation operations, committing $288 million to these initial phases. This collaboration underscores the growing economic ties between Algeria and Saudi Arabia, and their shared interest in developing hydrocarbon resources.
A key aspect of the project is the commitment to prioritizing Algerian companies throughout its various stages. Hachichi emphasized that Algerian firms will be actively involved, aiming to bolster their role in the hydrocarbon value chain and foster local expertise. This approach aligns with Algeria’s broader strategy of promoting domestic industry and creating employment opportunities within the energy sector.
The Sonatrach-Madad partnership aims to achieve a total production of 955 million barrels of oil equivalent. This ambitious target includes 125 billion cubic meters of gas and 204 million barrels of liquid hydrocarbons. The liquid hydrocarbon component is further broken down into 103 million barrels of liquefied petroleum gas (LPG) and 101 million barrels of condensates. These figures highlight the strategic importance of the project in contributing to Algeria’s energy production and export capacity.
According to Hachichi, the project’s execution will adhere to the highest standards of quality and efficiency. Furthermore, strict compliance with environmental protection requirements will be paramount. The project will also leverage the latest technological and digital solutions in the petroleum industry to optimize operations and minimize environmental impact. This commitment to sustainability and innovation reflects a modern approach to hydrocarbon development, ensuring responsible resource management and environmental stewardship. The partnership signifies a crucial step in strengthening Algeria’s position as a key player in the global energy market while fostering economic growth and technological advancement within the country.
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Written by Noor Eleslam
