Africa’s third-largest crude oil reserves holder, Algeria, is set to undergo a major transformation in its hydrocarbon sector over the next four years, as it anticipates a $50 billion investment.
This projection was revealed by the country’s National Agency for the Valorization of Hydrocarbon Resources (ALNAFT) during the launch of the 2024 oil licensing round in November 2024. This round is the first in a series of five licensing rounds planned between 2024 and 2029.
During the launch, ALNAFT President Mourad Beldjehem offered six onshore oil blocks in a competitive bid to both foreign and indigenous players. The bidding process, which opened on November 26, 2024, will run until April 15, 2025.
The six blocks, earmarked for exploration and production, include M’Zaid, Ahara, Reggane II, and Zerafa II, which will be offered under Production Sharing Contracts (PSCs). Meanwhile, Toual and Kern El-Kassa will be made available under Participation Agreements.
Meanwhile, over 70% of this is expected to target exploration and production activities in its upstream oil sector.
“We have been working with IOCs for more than 35 years and never had a problem with contract sanctity. In Algeria, a contract is a holy document,” Beldjehem emphasized. “We previously had one type of contract for partnership, and now we have three: production-sharing, concession, and risk services contracts.”
Algeria aims to boost upstream investment to drive new exploration activities, with the government committed to achieving this goal.
“We need more exploration. Today, we have more than 240 discoveries waiting to be developed. We need to make more discoveries to increase our reserves. We are looking for companies who are strong in exploration,” Beldjehem added.
The six blocks on offer cover approximately 152,000 square kilometers, providing vast opportunities for exploration and development. These hydrocarbon-rich areas are supported by extensive geological and geophysical data, including 2D and 3D seismic data, offering potential investors crucial insights into Algeria’s subsurface potential.
Beldjehem also said that the licensing round will adhere strictly to Law 13-19, positioning it as a game changer for Algeria’s oil industry. According to the bid guidelines, submissions will close on April 15, 2025, with the results to be officially announced in Algiers on May 29, 2025.
The new licensing round is a pivotal moment in Algeria’s strategy to increase hydrocarbon production and attract significant foreign investment into its oil and gas sector.
As part of its five-year licensing strategy extending through 2029, the round reflects Algeria’s long-term vision for its hydrocarbon sector.
Recently, oil-producing countries across Africa have witnessed a surge in upstream capital inflow from international players. Perhaps why Europe has increased its gas imports from the continent of late.
In addition to oil, Algeria boasts vast natural gas reserves of approximately 159 trillion cubic feet. As a major gas supplier to Europe, Algeria is seen as a strategic partner in Europe’s efforts to reduce dependence on Russian gas.
