Hydrocarbon agreements deepen China-Algeria energy relations

According to Sonatrach’s statement, the agreement sets the stage for “one or more hydrocarbon agreements” and aims to assess and develop resources, integrating best practices for the preservation of the environment and responsible exploitation of natural resources.”

Sinopec, formally known as China Petroleum and Chemical Corporation, has maintained a foothold in Algeria since 2002, operating the Zarzaïtine field under a production-sharing agreement. The Chinese oil giant has increased its involvement in recent years. In February, it committed $850 million toward exploration in the Hassi Berkane perimeter. Most recently, it secured rights to the Kirn El Kassa II block through a tender launched by Alnaft, Algeria’s national hydrocarbons agency.

The memorandum of understanding (MoU) also reflects Algeria’s broader push to modernise energy infrastructure, diversify partnerships, and bolster production efficiency amid challenging market dynamics and maturing oil fields.

Sonatrach described the MoU as expressing a shared intent to “strengthen their existing relations and expand their cooperation through new partnership opportunities.” Sinopec aims to boost energy ties and long-term resource access. While both companies frame the deal as a step forward in sustainable development, there is little clarity on environmental oversight or transparency around terms of investment.

The timing of the agreement coincides with growing concerns over Algeria’s energy sector, as the country seeks to attract foreign investment amid declining domestic output and fluctuating global demand. China, for its part, continues to expand its footprint in North Africa’s resource sectors, leveraging state-owned giants like Sinopec as vehicles for broader strategic interests.