Italian energy giant Eni said on Monday it had agreed with Algeria’s state-owned Sonatrach to take a 49 percent stake in three oil blocks in the Algerian desert estimated to hold 145 million barrels of oil.
The licences cover an area in the North Berkine basin where all Eni’s production assets are located and production is expected to start by the end of 2020, Eni said in a statement.
The agreement, signed at the Algeria Future Energy Summit in Algiers by Eni’s chief executive officer Claudio Descalzi and Sonatrach chairman and director-general Abdelmoumem Ould Kaddour, will cover three areas: Sif Fatima II, Zemlet El Arbi and Ourhoud II, the statement 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,” said Descalzi.
Sonatrach will retain a 51 percent stake in the three blocks and Eni’s entry into the three concession contracts is subject to approval by the Algerian authorities, according to the statement.
The development will benefit from synergies with existing facilities in the area, as well as new projects and infrastructure that are currently under construction, the statement added.
Eni, the biggest foreign oil and gas player in Algeria, has been present in the country since 1981 and currently participates in 32 mining permits with an equity production in the country of 90,000 boe per day.