Algeria Expands Oil Production in Major Deal

By Abby Burczyk

In recent weeks, Algeria has been expanding its oil and natural gas production. Sonatrach, an oil company owned by the Algerian government, credits itself with being the largest company in Africa. On October 23, Sonatrach signed a $5.4 billion deal with Midad Energy, originating from Saudi Arabia. This deal solidifies oil and gas exploration and development projects over the next 30 years. The contract between the two companies aims to develop the Illizi Basin in western Algeria. It is estimated around 993 million barrels of oil could be produced during the contractural period of this project. This partnership between Sonatrach and Midad Energy comes amid an ongoing push for foreign investment and collaboration for energy production by the Algerian company. 

Earlier this year, Sonatrach signed a contract with the Chinese energy company, Sinopec. Like other partnerships, Sinopec and Sonatrach agreed to $850 million for development and exploration efforts. In addition to the creation of new projects, Sonatrach is also revisiting old projects. The Libyan National Oil Corporation announced on October 23 that Sonatrach has resumed oil operations in Libya. Previously, Algeria and Libya agreed to oil exploration partnership efforts in 2008 with projects in Libya being abandoned by 2014 due to security concerns. In 2025, Libya kickstarted an oil and gas sector recovery plan to increase foreign investment. Libya processes oil reserves capable of producing 48 billion barrels, the largest oil reserve in Africa. 

The recent expansion of oil and gas projects is a projection of the future of Algerian development. The Energy and Mines Minister, Mohamed Arkab, said in early October the country will invest $60 billion in energy development over the next 5 years. Though most ongoing projects are currently aimed at nonrenewable energy sources, Arkab stated that Algeria is generating projects in cleaner energy sources. In the upcoming years, the international community should be prepared to see growth in energy supply coming out of the northern region of Africa in both traditional and in more sustainable ways.