Algeria’s Sonatrach and the Saudi company Medad Energy North Africa signed a hydrocarbons contract on Monday in the form of production sharing, related to the exploration and exploitation of hydrocarbons in the contractual area of Illizi South, located in the Illizi Basin, approximately 100 kilometers south of In Amenas.
The contract was signed by the CEO of the Sonatrach Group, Rachid Hachichi, and the CEO of Medad Energy North Africa, Cheikh Abdulelah Bin Mohammed Bin Abdullah Al-Aiban. The signing ceremony was attended by the Algerian Minister of State, Minister of Hydrocarbons and Mines, Mohamed Arkab, the Ambassador of the Kingdom of Saudi Arabia to Algeria, Abdullah bin Nasser Al-Busairi, as well as the Chairman of the Managing Committee of the National Agency for the Valorization of Hydrocarbon Resources (ALNAFT), and the President of the Hydrocarbons Regulatory Authority.
This contract, signed under the provisions of Law No. 199 relating to hydrocarbons, extends over a period of thirty years, with the possibility of a ten-year extension. It includes an exploration phase lasting seven years, Sonatrach said in a press release.
The total planned investments for the exploration and exploitation of this block will be 100% financed by the partner, Medad Energy North Africa, with a total amount of approximately $5.4 billion, including $288 million allocated for exploration investments, the source said.
The work program associated with this contract will be carried out in strict compliance with environmental protection requirements and in accordance with the regulations in force in Algeria. The program also includes the use of the latest technological and digital solutions.
Moreover, priority will be given to assigning local content and subcontracting to national operators as part of the implementation of this contract.
The expected production from the exploitation of the Illizi South block by the end of the contractual period is estimated at 993 million barrels of oil equivalent, including:
125 billion cubic meters of gas intended for marketing, as well as 204 million barrels of liquid hydrocarbons, comprising: 103 million barrels of liquefied petroleum gas (LPG), and 101 million barrels of condensates.
For reference, the signing of this contract comes as the culmination of the work resulting from the protocol agreement signed between Sonatrach and Medad Energy North Africa on March 3, 2024.
