Algeria’s state-owned energy company Sonatrach has signed a $5.4 billion exploration and production agreement with Saudi Arabia’s Midad Energy North Africa, Algerian state television reported on Monday, October 13. The deal, structured as a production-sharing contract, covers oil and gas exploration and development in the Illizi Sud field, located about 60 miles south of In Amenas in Algeria’s Sahara region. The agreement spans 30 years, with an option for a 10-year extension, and includes an initial seven-year exploration phase.
Midad Energy’s CEO, Sheikh Abdulelah Bin Mohammed Bin Abdullah Al-Aiban, visited Algeria earlier this year, meeting then–energy minister Mohamed Arkab, who now serves as Minister of Hydrocarbons and Mines. During that visit, Al-Aiban emphasized Saudi interest in expanding its energy investments in Algeria, citing what he described as favorable business conditions and promising prospects in the country’s hydrocarbon sector.
The new deal marks the second major contract signed by Sonatrach in less than four months. On July 7, the Algerian firm entered into a $1.3 billion agreement with Italy’s Eni for exploration and production in the Zemoul El Kbar block within the Berkine basin in southern Algeria.
The contract with Midad Energy illustrates Algeria’s deepening ties with Gulf partners as it seeks to attract fresh investment to sustain oil and gas output amid rising competition in the regional energy market. For Saudi Arabia, it signals a continued strategy of expanding its upstream footprint across North Africa, complementing its broader diversification efforts in energy services and production.
