To strengthen its position in Algeria, Eni, an Italian oil company will team up with Total to look for oil and gas in the North African country. To pursue offshore exploration in the OPEC country, the two oil companies signed a deal with state-owned Algerian energy giant Sonatrach.
Following a crash in prices in 2014, Algeria is seeking to increase oil output to boost revenues. The recent rebound in prices has allowed Sonatrach to invest in petrochemicals, unconventional and offshore.
Eni CEO, Claudio Descalzi said “together with Sonatrach and Total, we will have the opportunity to explore the deep waters of the Algerian offshore, a virtually unexplored geological province”.
The Italian oil company, which is the biggest foreign oil and gas player in Algeria, said it had also agreed with Sonatrach to take a 49 percent stake in three oil blocks in the Algerian desert. The oil blocks are estimated to hold 145 million barrels of oil.
The licenses 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 has been operating in Algeria since 1981 and has strategic contracts with Sonatrach, which imported 27 percent of Italy’s gas last year.
Reiterating Eni’s commitment to investing in Algeria, Total’s CEO Patrick Pouyanne said “we will also invest more in Algeria because trust and confidence are back”.