This agreement confirms Algeria’s important place in Europe’s energy supply and security issues.
The Algerian state oil and gas group Sonatrach announced on May 23 that it had signed a “memorandum of understanding” with the American giant ExxonMobil for the development of hydrocarbon resources in two gas fields in southern Algeria.
Important milestone
The two companies plan to “study existing opportunities to develop hydrocarbon resources in the Ahnet basin (south) and the Gourara basin,” Sonatrach said in a press release.
The agreement was signed in Algiers by the CEO of Sonatrach Rachid Hachichi and the vice-president of Exploration and New Opportunities of ExxonMobil, John Ardill. No amount was mentioned for the planned investments, nor the potential reserves of the two hydrocarbon fields.
According to American energy expert Geoff Porter, this agreement marks “an important step for Sonatrach which has not attracted new foreign companies for years”. The agreement in principle “should lead to an exploration and production contract” which will however require negotiations likely to “take between 12 and 36 months”, analyzes the specialist.
This agreement “opens new prospects for the development of the Algerian mining sector and demonstrates the desire of the two companies to achieve responsible and sustainable exploitation of natural resources”, rejoiced Rachid Hachichi. For his part, John Ardill insisted on the contribution by ExxonMobil of “cutting edge capabilities”, believing that the agreement is an “important first step in the creation of a partnership which will help to further unlock the potential of resource development from Algeria “.
“Very positive sign for Algeria”
In June 2023, the American economic daily Wall Street Journal mentioned “advanced negotiations” between Sonatrach on the one hand and the American giants Exxon and Chevron to “exploit for the first time” the country’s vast gas reserves. The newspaper had reported on talks concerning rights to exploit conventional gas deposits and shale gas, a natural gas contained in clay rocks whose exploitation by hydraulic fracturing is controversial because of its impact on the environment. The Ahnet, Gourara, and Berkine basins were then mentioned.
The protocol signed on May 23 emphasizes that future studies will “emphasize operational excellence, technological innovation, and respect for the environment.” According to Geoff Porter, this agreement is “a very positive sign for Algeria”, synonymous with success for its strategy of diversifying investments in exploration. Furthermore, “this shows that (foreign) energy companies take seriously Algeria’s potential to guarantee Europe’s energy security .”
“Algeria is important for Europe, it has gas reserves and is stable. The fact that Exxon considers it a good destination for its investments will be a signal to other companies,” he added.
