• $5.4 billion production-sharing contract covers Illizi Basin exploration
• 30-year agreement includes a $288 million exploration phase funded by Midad
• Algeria targets stronger energy sovereignty despite rising foreign partnerships

Sonatrach announced on October 13, 2025, the signing of a $5.4 billion production-sharing contract with Midad Energy North Africa, a subsidiary of Saudi group Midad Energy. The agreement covers the exploration and development of hydrocarbons in the Illizi Basin, located in southeastern Algeria near the Libyan border, an area known for its high potential.

According to details reported by international media, the contract spans 30 years, with an option to extend for an additional ten years. It includes a seven-year exploration phase fully financed by the Saudi partner for about $288 million. Sonatrach estimates that total investments under the deal could generate around 993 million barrels of oil equivalent, including 125 billion m³ of marketable gas and 204 million barrels of liquid hydrocarbons such as LPG and condensates.

The agreement comes as Algeria strengthens international partnerships to boost production and modernize its energy infrastructure. Earlier this month, the country announced a $60 billion investment plan for 2025–2029, with 80% dedicated to hydrocarbon exploration and production.

During the NAPEC 2025 energy exhibition, Minister of Energy and Mines Mohamed Arkab reiterated Algeria’s ambition to achieve full national production in the oil and gas sector in the medium term. Sonatrach is leading a $7 billion program to expand domestic refining and petrochemical capacity, with the goal of increasing the share of locally processed hydrocarbons from 32% to 50% by 2030.

This strategy, however, raises questions about how the country will reconcile its push for industrial sovereignty with the growing number of foreign partnerships. Before the deal with Midad Energy, Sonatrach awarded a contract worth about $855 million in July to China’s Jereh Oil & Gas Engineering for the construction of a compression station and new gas pipelines at the Rhourde Nouss field. In February, it signed an $850 million exploration and development deal with Sinopec, and later this year announced a $1.35 billion agreement with Italy’s Eni for the exploitation of the Zemoul El Kbar field.