Algeria Signs $1bn Oilfield Expansion Deal to Raise Output

Algeria on Tuesday signed an oilfield expansion agreement worth more than $1 billion as the country seeks to increase hydrocarbon production and strengthen its role in international energy markets.

State-owned Sonatrach signed the engineering, procurement and construction contract for the expansion of the Hassi Bir Rekaiz oilfield with a consortium comprising Petrojet, Italy-based Arkad and PTT Exploration and Production.

The project marks the second phase of development at the field, located in the Berkine Basin in southeastern Algeria near the borders with Libya and Tunisia.

Under the agreement, the consortium will build a crude processing facility with capacity of about 31,500 barrels per day, alongside gas treatment and produced water infrastructure. Completion is expected within 39 months.

Production at Hassi Bir Rekaiz began in 2022 after an earlier development phase launched in 2019. Output from the field currently stands at roughly 17,000 barrels per day.

Authorities are targeting production of around 30,000 barrels per day by 2029, with longer-term ambitions to raise capacity to 60,000 barrels daily. The expansion project will also involve drilling additional wells and constructing transport infrastructure to improve operational efficiency and recovery rates.

Alongside the EPC agreement, Sonatrach signed a memorandum of understanding with the Egyptian General Petroleum Corporation covering cooperation in crude oil and petroleum product marketing.

Algerian Energy Minister Mohamed Arkab said the agreements reflect growing economic cooperation between African and Arab countries.

The investment forms part of Algeria’s wider strategy to attract foreign capital into its oil and gas industry as European demand for alternative suppliers continues to grow following shifts in global energy trade.

Algeria remains one of Africa’s largest gas exporters, supplying Europe through pipeline networks connected to Spain and Italy.