At a Glance
- Saudi Midad Energy inks $5.4B deal with Algeria’s Sonatrach for Illizi South project.
- Partnership deepens Gulf investment in Africa’s oil sector, boosting Algeria’s production capacity.
- Thirty-year agreement aligns with Saudi Vision 2030’s push for global energy expansion.
Midad Energy, a Saudi Arabian energy investor and operator, has signed a $5.4 billion production-sharing agreement with Algeria’s state-owned Sonatrach, marking one of the largest bilateral energy deals between the two nations.
The long-term partnership underscores Riyadh’s growing interest in Africa’s energy markets and highlights how Gulf investors are looking beyond their borders to expand upstream operations.
The fully financed agreement covers exploration and development of the Illizi South block in southeastern Algeria, near the Libyan border.
Under the terms, Midad will lead operations for 30 years, with an option to extend for another decade. The deal reflects both nations’ efforts to deepen cooperation under the OPEC framework and build long-term energy security in a volatile global market.
Expanding Saudi reach into North Africa
Located about 100 kilometers south of In Amenas, the Illizi South project includes a seven-year exploration phase estimated at $288 million.
Early studies suggest the field holds roughly 993 million barrels of oil equivalent, including about 125 billion cubic meters of natural gas—making it one of Algeria’s most promising undeveloped reserves.
“This agreement represents a major step in Midad Energy’s international expansion,” said Abdulelah bin Mohammed Al Aiban, the company’s chairman and chief executive.
“By combining our expertise in complex upstream operations with Sonatrach’s local experience, we are confident this project will deliver strong results for both countries.”
For Midad, founded in 1994, the project adds to a growing global portfolio that includes participation in landmark international oil ventures such as the “Contract of the Century.”
The company’s steady rise mirrors Saudi Arabia’s broader goal to diversify its overseas energy footprint under its Vision 2030 economic reform plan.
Gulf capital backs Algeria’s energy resurgence
For Algeria, the partnership signals a renewed wave of investment from Gulf producers eager to secure African oil and gas opportunities.
The deal is expected to boost Sonatrach’s production capacity and accelerate development in the Illizi Basin, one of the nation’s least explored yet most resource-rich areas.
Sonatrach, Africa’s largest oil and gas producer, continues to anchor the country’s economy through exploration, refining, and hydrocarbon exports.
The new collaboration with Midad is part of Algeria’s broader effort to attract foreign capital and technology after years of underinvestment.
As demand for reliable energy supply grows worldwide, the Saudi–Algerian alliance marks a fresh phase of cross-regional cooperation—one that could redefine North Africa’s role in the global energy landscape.
