Algeria has taken bold steps to strengthen its position as a key player in the global energy market. With its new licensing strategy and offshore exploration agreements, the country is poised to attract significant investments and expand its hydrocarbon potential, ensuring a steady flow of revenue and development.
The National Agency for the Valorization of Hydrocarbon Resources (ALNAFT) has launched an ambitious five-year licensing strategy targeting investments of up to US$50 billion. Announced in November 2024, this initiative invites both domestic and international investors to explore Algeria’s rich onshore hydrocarbon resources. Currently, six onshore blocks are up for grabs, including M’Zaid, Ahara, Reggane II, and Zerafa II, offered under Production Sharing Contracts (PSCs). Bid submissions for these blocks are due by April 15, 2025, with contracts set to be awarded in Algiers on May 29.
To support this effort, ALNAFT has amassed an extensive database of over 102,000 line-kilometers of 2D seismic data and more than 45,000 km² of 3D seismic data. This wealth of geological information provides investors with a detailed and transparent view of Algeria’s subsurface, facilitating the identification of promising hydrocarbon prospects.
Complementing these onshore efforts, Algeria is also making strides in offshore exploration. On January 26, 2025, the country signed a two-year agreement with Chevron North Africa to assess potential offshore oil resources in the Mediterranean. This partnership aims to conduct an in-depth study of Algeria’s offshore oil reserves, potentially paving the way for future exploration and development projects. Mourad Beldjehem, ALNAFT’s president, highlighted the agreement as part of the agency’s broader efforts to attract high-quality investments and enhance Algeria’s technical capabilities in offshore exploration.
This offshore push builds on earlier efforts. In 2018, Algeria’s state-run company Sonatrach signed agreements with France’s Total and Italy’s Eni to evaluate offshore oil reserves. These agreements underscored Algeria’s commitment to diversifying its hydrocarbon strategy and exploring untapped potential in the Mediterranean.
Algeria, the largest country in Africa, derives over 90% of its foreign exchange earnings from hydrocarbons. By integrating onshore and offshore strategies, the country aims to secure a consistent flow of investments, diversify its energy resources, and sustain its economic resilience in the face of global energy challenges.
This dual-pronged approach reflects Algeria’s ambition to remain a competitive force in the energy sector, inviting investors to participate in its growth while exploring new frontiers in hydrocarbon development. With significant steps already underway, the future of Algeria’s energy landscape looks promising.
Hope&Chadia
