Algeria’s $50B Hydrocarbon Drive: Projects to Watch in 2025

On the back of the country’s recently announced five-year licensing plan, Algeria has positioned itself for increased upstream investment and capital injection to drive new exploration activities. The country plans to inject nearly $50 billion into hydrocarbon projects over the next four years, 71% of which will be directed to exploration and production. With crude oil reserves estimated at 12.2 billion barrels – the third largest in Africa and tenth largest globally – and home to approximately 159 trillion cubic feet of natural gas reserves, Algeria offers the chance for companies to make high-impact discoveries.

2024 Bid Round Opportunities

Alegria’s upstream regulatory the National Agency for the Valorization of Hydrocarbon Resources (ALNAFT) recently published the specifications for its first tender as part of a series of licensing rounds scheduled over a five-year period. ALNAFT prepared 17 hydrocarbon exploration projects – six of which are now available for tender – and plans to issue one call per year through 2029.

The bid round includes opportunities for production sharing contracts for the Le Grand M’Zaid, Ahara, Reggane II and Zerafe II projects and participation agreements for the Toual and Guern El Guessa projects. The deadline for bid submissions is April 15, 2025, which will be followed by the evaluation and awarding of bids.

The six high-potential opportunities consist of a mix of exploration, development and export opportunities and have attracted interest from energy majors including ExxonMobil, Chevron and Eni. The opportunities span a cumulative perimeter size of 152,000km², supported by over 102,000-line km of 2D seismic data and more than 45,000km² of 3D seismic data.

In November, ALNAFT officially opened tender documents and data rooms for the 2024 bid round. As such, potential bidders will have access to perimeter conditioned data packages and evergreened data packages during the data access period, which runs to April 1, 2025.

Gas Field Developments to Watch in 2025

Expected to begin commercial operation in 2025, development of the Ahnet unconventional gas field will involve drilling approximately 15 wells in southern Algeria. At a cost of approximately $2 billion, production from the development is expected to peak in 2026 and continue until the field reaches its economic limit in 2069.

Meanwhile, Algeria’s national oil company Sonatrach signed a MoU with ExxonMobil in May to develop two gas fields in the Ahnet and Gouara basins. Negotiations for the deal are expected to take between 12 and 36 months.

Sonatrach is also collaborating with Libya’s parastatal National Oil Corporation (NOC) to enhance collaboration in drilling and workover services in Algeria’s hydrocarbons sector. Under the agreement, the NOC will provide rigs, maintenance and training to Sonatrach subsidiary the National Petroleum Works Company while exploring opportunities for collaboration in the areas of drilling, geophysics, well intervention, stimulation and construction.