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    Eni, Sonatrach pen deal on developing Algeria's Berkine basin


The contract is the first to be signed under Algeria's new oil law.

by: Joseph Murphy

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Eni, Sonatrach pen deal on developing Algeria's Berkine basin

Italy's Eni and Algeria's Sonatrach have signed a contract on further development of the Berkine oil and gas basin in the north African country, they said on December 14.

The contract – the first to be signed under Algeria's new oil law  covers development in a 7,880-km2 area in the south of the Berkine basin, near the two companies' existing Menzel Ledjemet East (MLE) and Central Area Field Complex producing assets. 


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The project's first stage envisages the fast-tracked development of some 135mn barrels of oil equivalent, with production due to start before the end of 2022. The contract will enter into force after approval from Algerian authorities.

Eni and Sonatrach also signed a memorandum on cooperating on energy transition  projects, including in the areas of hydrogen and CO2 capture, storage and utilisation.

"Today's agreements are testimony to the commitment of Sonatrach and Eni to continue the shared strategy of accelerated project development, and to pursue the decarbonisation objectives within our common commitment to achieve carbon neutrality," Eni CEO Claudio Descalzi said in a statement. 

Eni has been working in Algeria since 1981 and is Sonatrach's closest foreign partner. It currently produces some 95,000 barrels of oil equivalent/day in the country, and it is also partnered with Sonatrach at the Transmed pipeline that exports up to 32bn m3/year of Algerian gas to Italy via Tunisia.

Algeria introduced its new hydrocarbon law in late 2019, marking a return to the attractive provisions in Algeria's 1986 oil and gas law, which led to a number of major discoveries before the regulations were changed in the mid-2000s, sapping investment. Read more about Algeria's upstream sector here.