Algeria and Egypt deepen partnership with new energy agreement
Algeria and Egypt have agreed to a major energy deal that will expand oil production in the Algerian desert and pave the way for new regional fuel trading, Algiers-friendly ALNEWS 24 reports.
Signed on April 5th, the contract officially greenlights the second phase of development at the Hassi Bir Rekaiz oil field in eastern Algeria. Alongside this main agreement, the two North African nations signed a memorandum of understanding to structure how they will market and sell crude oil and refined petroleum products to one another in the future. The official signing took place at Sonatrach’s headquarters in Algiers, bringing together Algerian Energy Minister Mohamed Arkab and Egyptian Petroleum Minister Karim Ibrahim Ali Badawi.
Arkab framed the agreements as a direct result of instructions from both nations’ leaders to build closer economic ties across North Africa and the wider continent. To handle the actual physical construction of this new phase, Sonatrach and its long-time partner, Thailand’s exploration and production company PTTEP, awarded the engineering and construction contract to a joint venture made up of Egypt‘s PETROJET and Italy‘s ARKAD.
The Hassi Bir Rekaiz field itself sits in the northern Berkine Basin, stretching across the El Oued and Ouargla regions. This new $1 billion phase focuses on building a major processing facility capable of handling 31,500 barrels of crude oil a day, alongside systems to treat associated gas and wastewater. The consortium has 39 months to complete the project, which builds on an earlier phase launched in 2019 that established an initial output of 13,000 barrels per day. For Algiers, the expansion is a crucial step toward boosting its overall oil export capacity.
To push the commercial relationship further, Sonatrach’s new memorandum with the Egyptian General Petroleum Corporation will set up the ground rules for future direct oil trading. The Algerian Ministry of Hydrocarbons noted that this sudden influx of joint activity is highly supported by the country’s recent legal reforms, specifically Hydrocarbons Law 19-13 and Investment Law 22-18, which were passed to make foreign investment simpler and more secure. Pointing to these new laws, Arkab used the event to openly invite international firms, particularly Egyptian ones, to bid in the upcoming “Algeria Bid Round 2026” licensing auction.
Maghrebi.org, ALNEWS 24 and agencies.
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