Algeria: Sonatrach signs an $850 million contract with China's Sinopec for Hassi Berkane Nord

On Tuesday in Algiers, the Algerian oil group Sonatrach and the Chinese company Sinopec International Energy Investment (HK) Holding Ltd signed a production sharing contract for the exploration and exploitation of hydrocarbons in the Hassi Berkane Nord (HBAN) perimeter. Signed under the aegis of Law 19-13 governing oil and gas activities, the agreement marks a new stage in energy cooperation between Algeria and China.

The ceremony was attended by the Minister of Energy, Mines and Renewable Energies, Mohamed Arkab, the CEO of Sonatrach, Rachid Hachichi, the Chinese Ambassador to Algeria, Dong Guangli, and Niu Shuanwen, Senior Vice-President of Sinopec. The contract, the result of negotiations initiated by a memorandum of understanding dated 3 March 2024, commits the two parties to an ambitious exploration and development programme in this area located between the wilayas of Ouargla and El Meniaa, 80 km from Hassi Messaoud.

Worth an estimated total of $850 million, the project aims to develop the hydrocarbon resources of Hassi Berkane Nord through exploration and appraisal work. "This agreement reflects our joint desire to consolidate our already solid cooperation and to explore new opportunities in the hydrocarbons sector", Sonatrach emphasised in a press release. Present in Algeria since 2002, Sinopec is already working with the Algerian group on the Zarzaitine field, where it is helping to improve the recovery rate of oil reserves.

For the Ministry of Energy, the signing illustrates Algeria's commitment to strengthening its partnerships with major players in the energy sector. "This contract will enable us to create added value, develop our national industry and increase production using advanced technologies", said the Ministry in a press release. It is also part of a strategy to position Algeria as a reliable energy supplier on regional and international markets.

This new agreement strengthens a long-standing relationship between Sonatrach and Sinopec, while promoting technology transfer and the exchange of expertise. "It reflects our ambition to establish lasting collaborations with international companies to optimise our energy resources", added the ministry. In a global context where demand for hydrocarbons remains strong, this project could consolidate Algeria's position as one of the region's major producers.

With this investment, Sonatrach and Sinopec are confirming their desire to capitalise on the potential of the Algerian subsoil, while laying the foundations for broader cooperation. This partnership, anchored in a strategic vision, could pave the way for other major initiatives in the Algerian-Chinese energy sector.