Sonatrach, Partners to Invest $4bn in 2 Onshore Blocks in Algeria

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’s oil company Sonatrach and its partners have jointly signed a production sharing contract (PSC) to invest $4billion in onshore blocks 404 and 208, located in the prolific Berkine basin in Eastern Algeria.

Sonatrach partners include Occidental, France’s TotalEnergies, and Italy’s Eni. The 25-year PSC is expected to result in the additional recovery of more than one billion barrels of oil equivalent of hydrocarbons from the two blocks.

Signed under the 2019 Algerian Hydrocarbon Law, the contract for the blocks located in the Berkine basin will allow for the development of additional liquid hydrocarbon resources, while reducing carbon intensity through a dedicated carbon reduction programme, TotalEnergies said in a statement last Tuesday.

Also under the PSC agreement, the partners will carry out high density 3D seismic acquisitions, the drilling of 100 oil wells, and the conversion of 46 wells into WAG process wells.

“The opportunity to develop and valorise associated gas will be studied by the partners, thus increasing export potential towards Europe,” the statement said .

Quoting the chief executive of Sonatrach, Mr. Tewfik Hakkar, Reuters said the four companies will invest $4 billion in the perimeter of Berkine to produce 1 billion of oil equivalent barrels.

The scope of work also includes the realisation of studies of master plans and installation optimisation, the implementation of digitalisation solutions for oilfields, implementing two enhanced oil recovery pilot projects, and undertaking environmental projects to help reduce the CO₂ footprint.

“This new contract marks a new milestone in the strategic partnership with Sonatrach”, said Laurent Vivier, senior vice president for exploration and production at TotalEnergies in the and North Africa.

“This project is in line with the company’s strategy to develop low-cost oil, while contributing to carbon reduction programmes to minimise our carbon footprint.”

The north African country is Africa’s biggest gas exporter and supplies about 11% of the natural gas consumed in Europe. TotalEnergies is active in oil and gas exploration and production in Algeria, as well as in liquefied natural gas through contracts with Sonatrach.

TotalEnergies is also active in the marketing of lubricant and bitumen. Both companies have launched engineering studies for a petrochemical project in western Algeria.

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