Algeria signs oil and gas deal worth $5.4 billion with Saudi firm Midad Energy

Sonatrach, the state-owned energy firm of Algeria, announced on Monday that it had signed a $5.4 billion contract with Midad Energy from Saudi Arabia for oil and natural gas exploration and production in Algeria's Illizi Basin.

The contract for production sharing is 30 years long with the option of an extra 10 years. It also includes a 7-year exploration phase.

Midad Energy North Africa is fully funding the investment, which includes $288 million for exploration. Illizi South is located about 100 km south of In Amenas in Algeria, close to the Libyan border.

Ennahar TV was the first to announce this deal.

Sonatrach, Algeria's biggest oil and gas producer, has actively sought foreign partnerships to increase output and modernize the infrastructure.

The company had previously signed contracts with international partners. One of these was a contract worth $850 million with Sinopec, a Chinese oil and gas exploration and development company.

Algeria's Energy Minister said earlier this month that the country will invest $60 billion over the next five-year period in the energy sector, with an emphasis on upstream exploration.

North African nation, a member of the Organization of the Petroleum Exporting Countries(OPEC), aims at strengthening its role as a major supplier of energy on international markets. It also wants to meet domestic demand while making a shift to sustainable sources.

Midad Energy, part of Saudi Arabia’s Alturki Holdings, has investments in industrial services and energy, including upstream oil operations. (Reporting and writing by Jana Choukeir, Sarah El Safty and Tala Ramadan; editing by Susan Fenton).

(source: Reuters)