Algeria’s Sonatrach signs hydrocarbon exploration deal with Eni

Algerian state-owned oil company Sonatrach has signed an agreement with Italy’s Eni to strengthen their exploration and production partnership in the Berkine Basin.

The agreement was signed during Eni CEO Claudio Descalzi’s visit to Algeria, where he met with Algerian Minister of Energy Abdelmadjid Attar to discuss energy activities in the country.

The deal details the roadmap for a new hydrocarbon contract in the southern area of the basin.

It comes under the memorandum of understanding (MoU) signed last July to deliver a new gas and oil development hub in the region through synergies with the existing MLE-CAFC (Block 405b) assets.

Notably, Algeria implemented a new energy law last December to boost investment in the sector. The latest agreement also comes under the aegis of the new oil law.

During the meeting, Hakkar and Descalzi agreed to resume exploration and development activities in the area by optimising existing infrastructure and leveraging local material.

They also verified the expansion of the BRN photovoltaic plant and the development of another plant at the MLE site, which will power the existing gas treatment plant with clean energy.

Additionally, Sonatrach and Eni agreed to reduce carbon footprint in natural gas production by utilising energy efficient processes and electrification of treatment plants among others.

Descalzi said: “Today’s agreement testifies to the commitment of Sonatrach and Eni to expand their partnership in Algeria, in line with their shared strategy of the accelerated development of their projects and pursuing their common objectives of decarbonisation as part of their commitment to achieve long-term carbon neutrality, reducing and compensating for climate-changing gas emissions up to zero.”

Currently, Eni operates 32 permits in Algeria with a combined equity production of 80,000 barrels of oil equivalent per day.

Earlier this year, the companies completed the construction of a gas pipeline in the Berkine basin.