Eni and Sonatrach signed an agreement that will see Eni take a 49 per cent stake in 3 concessions in the onshore North Berkine basin.
The Chairman and Director General of Algeria’s state oil company Sonatrach, Abdelmoumem Ould Kaddour, and the Chief Executive Officer of Eni, Claudio Descalzi, signed the deal on Monday for oil concessions located in the Algerian desert.
The agreement, which was signed at the Algeria Future Energy Summit in Algiers, will cover three areas: Sif Fatima II, Zemlet El Arbi and Ourhoud II. Sonatrach will retain a 51 per cent stake, Eni said in a statement.
Eni's CEO, Claudio Descalzi, said: “Today's agreement is further confirmation of Algeria's strategic importance, where Eni has planned significant investments over the next few years. With Sonatrach, we will work together to position North Berkine basin as a gas hub. The country still has a lot of gas and Eni will leverage its technology and skills to develop it”.
The licenses cover a total area of 8500 km2 and are located in the North Berkine basin, an area where Eni has had a leading position since 1981 and where all the company's current production assets are also located, including Bir Rebaa North (BRN), from where Eni began producing oil in the country in 1995.
Eni and Sonatrach will carry out an important exploration program in order to develop the reserves of the three blocks, estimated at 145 million barrels of oil equivalent. Production is expected to start by the end of 2020, the company said.
The development will benefit from synergies with existing facilities in the area, as well as new projects and infrastructure that are currently under construction. These include a 180km-long gas pipeline that is being fast-tracked and will connect the oil fields of BRN and MLE.
Eni's entry into the three concession contracts is subject to approval by the Algerian authorities.
Eni has been present in Algeria since 1981 and currently participates in 32 mining permits with an equity production in the country of 90,000 boe per day, making the company the main international player in the country.
Separately, Eni, Sonatrach and Total signed two agreements which include an exclusive partnership for offshore exploration in Algeria in a virtually unexplored geological province.
Eni and Total will also pursue obtaining exploration permits that will allow for the rapid completion of the hydrocarbon potential assessment, Eni said in a separate statement.