Sonatrach, Algeria’s state-owned oil and gas company, has announced a major hydrocarbon contract with Midad Energy North Africa, a subsidiary of Saudi Arabia’s Midad Energy, valued at approximately USD 5.4 billion. The agreement, signed in mid-October 2025, covers exploration and exploitation of hydrocarbons in the Illizi South perimeter, about 100 kilometres south of In Amenas in southeastern Algeria. The contract establishes a 30-year production-sharing partnership, with the possibility of a ten-year extension, and includes an initial seven-year exploration phase.

Under the terms of the deal, Midad Energy will finance the entire investment, beginning with around USD 288 million for exploration activities. Over the life of the contract, total investments are expected to reach USD 5.4 billion. Projected recoverable resources are estimated at 993 million barrels of oil equivalent, including roughly 125 billion cubic metres of natural gas and 204 million barrels of liquid hydrocarbons, divided between condensate and liquefied petroleum gas (LPG).

Both parties emphasised that the project aligns with Algeria’s new hydrocarbons law, which aims to attract foreign investment while maintaining national control over strategic resources. The companies also highlighted commitments to environmental protection, the use of advanced digital technologies, and strong local-content participation, ensuring that Algerian subcontractors and suppliers play a significant role in the project.

For Algeria, the partnership is a strategic step toward boosting upstream production, strengthening energy security, and expanding collaboration with Gulf partners. For Midad, it marks a significant expansion into the North African energy market and reinforces Saudi Arabia’s broader strategy of developing international energy assets. The agreement follows a protocol of understanding signed between Sonatrach and Midad in March 2024, and represents one of the largest upstream investments in Algeria in recent years.

KeyFacts Energy: Sonatrach Algeria country profile   l   KeyFacts Energy Industry Directory: Midad Energy