Algeria: Arkab and Midad Energy accelerate $5.4 billion Illizi Sud project

Algeria's energy sector is set for a significant boost as national oil company Sonatrach and Saudi group Midad Energy North Africa intensify efforts on a major hydrocarbon production sharing contract. Signed in October 2025, the agreement for the "Illizi Sud" perimeter is now receiving renewed acceleration, signaling a commitment to developing substantial energy reserves.

The partnership focuses on the exploration and exploitation of an area in the Illizi basin, approximately 100 kilometers south of In Amenas. This thirty-year contract, extendable by ten years, includes a seven-year exploration period and represents a global investment of $5.4 billion. The Saudi partner is fully financing this venture, with $288 million specifically allocated to research activities. The agreement was officially sanctioned by presidential decree n°26-113 on March 8, 2026.

This project is poised to significantly reshape Algeria's hydrocarbon landscape, with estimated reserves of nearly one billion barrels of oil equivalent. The projected output includes 125 billion cubic meters of gas for commercial sale, 103 million barrels of liquefied petroleum gas, and 101 million barrels of condensate. Initial tender requirements outlined minimum investments of $936 million, covering exploration, drilling, and development phases.

Minister of State Mohamed Arkab met with the CEO of Midad Energy North Africa, Cheikh Abdelilah Ben Mohamed Ben Abdallah Al Aiban, to review progress and discuss future prospects. The discussions underscored the importance of adhering to strict timelines and standards for project execution. The initiative aligns with Algeria's strategy to enhance the attractiveness of its energy sector by offering favorable fiscal conditions to foreign investors partnering with Sonatrach, while prioritizing environmental compliance and local content.