Algeria is on the brink of finalising an agreement with Chevron to enhance its natural gas exploration and production capabilities, reinforcing its position as a crucial supplier to Europe, reports Bloomberg.  

In an interview with state TV, Energy Minister Mohamed Arkab said the state-owned Sonatrach is expected to sign the contract to develop a substantial hydrocarbons field "within the next few days.” 

The North African nation is also poised to sign agreements with ExxonMobil before the end of the year to develop "very important fields," which Arkab believes will substantially boost Algeria's natural gas output.  

These developments come as Algeria's energy sector experiences a resurgence following Russia's invasion of Ukraine, stepping in to supply Europe amidst a scramble for alternative energy sources. 

Algeria, which contributes approximately 14% of the European Union's total imports of pipeline gas and liquefied natural gas (LNG), has recently secured increased purchase commitments from Italy, Spain, and Germany. 

“Algeria played a role in securing Europe’s energy needs” Arkab said.  

“We will continue doing that as a reliable country in terms of commitments to long term contracts and the big volumes we supply to the European markets and also other markets in Asia in the form of LNG.” 

Historically, Algeria's vast oil and gas reserves have been underutilised due to mismanagement and insufficient investment.  

However, reforms to the country's hydrocarbons and investment laws since 2020 have improved the investment climate.  

These changes have enabled Algeria to secure partnerships with industry leaders such as Equinor, Eni, and Occidental Petroleum, as stated by Arkab. 

In a bid to enhance its exploration activities, Algeria has made eight discoveries this year and aims to increase its production to 200 billion cubic meters annually from the current 137 billion cubic meters, the minister added.   

Recently, Sonatrach awarded a $2.3bn (AD309.26bn) contract to a consortium led by Baker Hughes and Tecnimont for the Hassi R’Mel gas field.  

Furthermore, Sonatrach entered into an agreement with ExxonMobil to evaluate the development potential of hydrocarbon resources in the Ahnet and Gourara basins.  

This follows a memorandum of understanding with Eni to commence research and exploitation in the Zemoul El Kbar, Rourde El Louh – Sif Fatima, and Rhourde Messaoud Nord areas.