Sonatrach, Sinopec Ink Landmark $850 Million Hydrocarbon Deal, Cementing Algerian-Chinese Energy Partnership

BY: Dr. Hana Saada

Algiers, Algeria | February 26th, 2025 — In a move set to deepen Algeria’s strategic energy alliances, Sonatrach, the Algerian state-owned hydrocarbon giant, has signed a landmark $850 million contract with China’s Sinopec International Energy Investment (HK) Holding Ltd. The agreement, formalized on Tuesday in Algiers, falls under Algeria’s hydrocarbon law No. 19-13 and pertains to the exploration and production of hydrocarbons in the Hassi Berkane Nord (HBAN) perimeter.

 

The high-profile signing ceremony was attended by Mohamed Arkab, Minister of Energy, Mines, and Renewable Energies, alongside Sonatrach CEO Rachid Hachichi, Chinese Ambassador to Algeria Dong Guangli, and Niu Shuanwen, Senior Vice President and Board Member of Sinopec Group.

 

According to an official statement released by Sonatrach, this agreement marks the culmination of negotiations stemming from a Protocol of Agreement signed between both companies on March 3, 2024. The deal commits Sonatrach and Sinopec to executing a minimum work program for hydrocarbon exploration and development within the HBAN perimeter, strategically located between the wilayas of Ouargla and El Meniaa, approximately 80 kilometers from Hassi Messaoud.

 

A Major Financial and Strategic Commitment

Sonatrach revealed that the total planned investment for the HBAN perimeter’s exploration and development stands at $850 million. This ambitious financial commitment underscores the long-standing partnership between Sonatrach and Sinopec, which has been present in Algeria since 2002 and is actively engaged in enhancing crude oil recovery at the Zarzaitine field.

 

“This signing underscores the mutual resolve of both entities to fortify their existing relationship and expand cooperation by seizing new partnership opportunities in hydrocarbon exploration and production,” the Algerian energy conglomerate stated.

 

The Ministry of Energy echoed this sentiment in a separate communiqué, emphasizing the broader geopolitical and economic implications of the agreement. “This accord marks a significant leap forward in Algerian-Chinese energy cooperation. It exemplifies Algeria’s commitment to bolstering strategic partnerships with major global energy players, fostering value creation, and driving the development of the national hydrocarbon industry,” the ministry asserted.

 

Beyond the immediate financial and operational dimensions, the agreement underscores Algeria’s ambition to cement its position as a reliable global energy supplier. The ministry highlighted the deal’s role in securing advanced technological transfers and fostering expertise exchange between Sonatrach and Sinopec, ensuring that Algeria remains at the forefront of innovation in hydrocarbon exploitation.

 

“This agreement reflects Sonatrach’s unwavering determination to forge strong alliances with leading international corporations to facilitate knowledge transfer, enhance technological capacity, and solidify Algeria’s standing in the regional and global energy markets,” the statement concluded.

 

 

 

 

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