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Algeria’s state-owned energy company Sonatrach and Italian energy giant Eni have entered into a significant production sharing agreement valued at USD 1.35 billion, aimed at enhancing hydrocarbon exploration and development in the Zemoul El Kbar region of the Berkin Basin. The contract outlines ambitious targets to recover an estimated 415 million barrels of oil equivalent, including around 9.3 billion cubic meters of sales gas.
This large-scale agreement is supported by the signing of two separate contracts, which formally extend and deepen exploration and production activities in the Zemoul El Kbar perimeters. The CEOs of both Sonatrach and Eni emphasized the strategic value of their longstanding partnership, which has been in place since the 1980s, reflecting decades of energy cooperation between Algeria and Italy.
Eni, which already operates in several Algerian gas basins—including Berkin, Illizi, and Ahnet—is actively pursuing further expansion, particularly in the Reggane II region. This move comes at a critical time: Algeria is seeking to boost its hydrocarbon output, while Italy is working to secure and diversify its energy supply sources, especially in light of recent global supply challenges.
As part of the development plan for the Zemoul El Kbar area, which spans approximately 4,291 square kilometers, the two partners will drill 16 new wells and carry out extensive infrastructure and connection work over a seven-year exploration and development phase. This initiative falls under a broader memorandum of understanding (MoU) signed in May 2024, which also outlines the potential extension of cooperation to three additional fields currently in production: Rhourd Louh, Sif Fatma, and Rhourd Messaoud Nord.
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In parallel with the production sharing deal, a separate gas agreement has been signed between Sonatrach and Eni. This agreement governs the marketing and export of dry gas extracted from the newly explored perimeters, especially those within Zemoul El Kbar. Together, these agreements underscore a deepening energy alliance between Algeria and Italy, focused on enhancing energy security, increasing production capacity, and fostering long-term collaboration in the strategic hydrocarbon sector.
