Sonatrach, Sinopec Join Forces for Hassi Berkane-North Exploration
ALGIERS, February 26, 2025 – Algerian oil company Sonatrach Group signed a contract on Tuesday in Algiers with the Chinese company Sinopec, involving a total investment estimated at $850 million for the exploration and production of the Hassi Berkane-North (HBAN) field, situated between the provinces of Ouargla and El-Meniaâ.
The agreement was executed by Farid Djettou, Vice President in charge of Exploration and Production, and Weisong XUE, General Manager of SINOPEC International Energy Investment (HK) Holding Ltd, during a ceremony presided over by Mohamed Arkab, Algerian Minister of State, Minister of Energy, Mines, and Renewable Energies. The event was also attended by Rachid Hachichi, CEO of Sonatrach, Niu Shuanwen, Senior Vice President of Sinopec, and the Chinese Ambassador, Dong GUANGLI.
This partnership establishes a production-sharing agreement between Sonatrach and Sinopec within the Hassi Berkane-North (HBAN) area, following direct negotiations as outlined in Article 91 of the Hydrocarbons Law. This article permits the public group to create a hydrocarbon contract through mutual agreement, after consulting with the National Agency for the Valorization of Hydrocarbon Resources (ALNAFT).
The HBAN region is located approximately 80 km southwest of Hassi Messaoud, encompassing nearly 9,700 km² within the Amguid Messaoud basin. This contract will facilitate the exploitation of hydrocarbons in blocks 428 and 429, which contain condensate natural gas.
With a duration of 30 years, renewable once for a period not exceeding ten years, this contract builds upon the memorandum of understanding signed by both parties last March. Initial financing for exploration will be fully provided by the Chinese company, while subsequent investments will be shared at a ratio of 30% for Sonatrach and 70% for Sinopec, contingent upon positive outcomes, as detailed in the agreement.
In his address during the event, Hachichi remarked that the signing of this contract signifies “a new milestone in our successful cooperation with Sinopec and serves as a clear testament to our joint commitment to strengthening this partnership and expanding it into broader prospects.” He also praised the successes achieved under their collaboration established in 2002 in the Zairzaitine field, which he characterized as a key pillar of their relationship with Sinopec.
For his part, Niu Shuanwen, Senior Vice President of Sinopec, emphasized that the signing of this contract represents “an important step” in the development of Algeria’s energy sector, particularly in gas production. The Chinese ambassador underscored the significance of the agreement, stressing that it would be “mutually beneficial,” while also commending the attractive incentives provided in Algeria’s Hydrocarbons Law and the new investment law.
