SONATRACH inks exploration and development agreement with Sinopec

SONATRACH and its Chinese partner Sinopec have signed an agreement with a view to assessing and developing hydrocarbon resources in the Basins of Gourara in south west Algeria and East Berkine in the south east of the country

As part of the agreement, the parties will discuss a work programme for the evaluation and exploitation of these resources, integrating best practices for the preservation of the environment and responsible exploitation of natural resources.

“The signing of this Head Of Agreement expresses the willingness of both parties to bolster their existing relationship and expand their cooperation through new partnership opportunities in hydrocarbons exploration and development,” said SONATRACH in a statement.

Sinopec has been present in Algeria since 2002 and operates the Zarzaïtine field with SONATRACH under the framework of a contract of association focusing on hydrocarbon recovery and development.

Sinopec is also SONATRACH‘s partner under the hydrocarbons agreement signed on 25 February 2025 under  Law 19-13 relating to the exploration and exploitation of the Hassi Berkane perimeter. The two companies signed a production sharing contract (PSA) for hydrocarbon development and exploration worth US$850mn, and will carry out exploration and appraisal drilling on the licence, which lies 80 km from the huge Hassi Messaoud field.

Algeria is rich in oil and gas resources and offers significant potential. It holds approximately 12.2bn barrels of proven crude oil reserves, making it the third-largest in Africa, along with 159 trillion cubic feet of proven natural gas reserves, and is the largest gas producer in the continent. Around two-thirds of Algeria's territory remains underexplored or underdeveloped.

The country is seeking international investment to boost hydrocarbons production. The National Agency for the Valorization of Hydrocarbon Resources (ALNAFT) unveiled six new onshore licensing opportunities for conventional hydrocarbon exploration in 2024, as part of a five-year licensing plan designed to attract global upstream investors. The six opportunities span a cumulative perimeter size of 152,000 sq. km, supported by over 102,000-line km of 2D seismic data and more than 45,000 km² of 3D seismic data.

In June, TotalEnergies, jointly with QatarEnergy, was awarded the Ahara exploration license following the 2024 bid round. It covers an area of approximately 14,900 sq km, located at the intersection of the prolific Berkine and Illizi Basins.

In early July, Sonatrach signed a PSA with Italy’s Eni to explore and develop the Zemoul El Kbar area in the Berkine Basin, around 300 km east of Hassi Messaoud.