Italian energy major ENI, France’s Total and Algeria’s Sonatrach signed on October 29 two agreements which include an exclusive partnership for offshore exploration in Algeria in a virtually unexplored geological province, ENI said.
ENI CEO Claudio Descalzi, Total CEO Patrick Pouyanné and Algeria’s state oil company Sonatrach Chairman Abdelmoumem Ould Kaddour signed two agreements during the Algeria Future Energy Summit in Algiers.
In parallel, ENI and Total will also pursue obtaining exploration permits that will allow for the rapid completion of the hydrocarbon potential assessment.
“Together with Sonatrach and Total, we will have the opportunity to explore the deep waters of the Algerian offshore, a virtually unexplored geological province where ENI will be able to contribute by leveraging its experience in the Eastern Mediterranean and its inventory of advanced exploration technologies,” Descalzi said.
Meanwhile, at the summit, ENI and Sonatrach also signed an agreement that will see ENI take a 49% stake in three oil concessions in the onshore North Berkine basin, located in the Algerian desert. The agreement will cover three areas: Sif Fatima II, Zemlet El Arbi and Ourhoud II. Sonatrach will retain a 51% stake.
The licenses cover a total area of 8500 square kilometres and are located in the North Berkine basin, an area where ENI has had a leading position since 1981 and where all the company’s current production assets are also located, including Bir Rebaa North (BRN), from where ENI began producing oil in the country in 1995, ENI said.
ENI and Sonatrach will carry out an important exploration program in order to develop the reserves of the three blocks, estimated at 145 million barrels of oil equivalent. Production is expected to start by the end of 2020.
According to ENI, the development will benefit from synergies with existing facilities in the area, as well as new projects and infrastructure that are currently under construction. These include a 180 kilometre-long gas pipeline that is being fast-tracked and will connect the oil fields of BRN and MLE.
ENI’s entry into the three concession contracts is subject to approval by the Algerian authorities.
“Today’s agreement is further confirmation of Algeria’s strategic importance, where ENI has planned significant investments over the next few years,” Descalzi said. “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,” he added.
ENI has been present in Algeria since 1981 and currently participates in 32 mining permits with an equity production in the country of 90,000 barrels of oil equivalent per day, making the company the main international player in the country.