Sonatrach unveils investment plan to boost Algeria’s hydrocarbon output

ALGIERS – Algeria has launched a major investment plan for its oil and gas sector covering 2025–2030, aiming to increase production capacity and ensure the long-term sustainability of this strategic industry amid declining extractable reserves and ongoing economic pressures.

The national strategy includes extensive drilling operations for a total of 1,450 wells, split between new explorations and the development of existing fields. Of these, 500 are earmarked as exploratory wells to identify new hydrocarbon deposits, while 950 are development wells aimed at enhancing production efficiency in operational fields. Additionally, around 6,300 existing wells will undergo maintenance and rehabilitation to boost output and limit natural depletion.

Noureddine Daoudi, CEO of state energy giant Sonatrach, told the Algerian Press Service that the programme is being implemented in cooperation with international partners, with foreign firms contributing up to 26 percent of total investment. He added that the budget covers roughly two-thirds of Algeria’s hydrocarbon-rich areas, signalling the country’s commitment to addressing the challenges posed by dwindling reserves.

In a move to attract foreign investment, Algeria in June 2025 granted new exploration licences to five international groups, following a competitive process in which 41 companies bid to operate across more than 150,000 square kilometres. In October 2025, Sonatrach signed a $5.4 billion contract with Saudi Arabia’s Medad Energy to develop exploration and production activities in the southern Illizi region, with the funding partner covering all exploration and operational costs.

Algeria’s recoverable oil reserves are estimated at 13 billion barrels, with projections indicating potential depletion within three decades if current production rates continue. The new strategy underscores the urgent need for intensified exploration and additional investment to safeguard the sector’s future.

Former Algerian Minister of Energy and Mines Mohamed Arkab revealed in 2024 that total investment in the energy and mining sector exceeded $9 billion in 2023, up from $8 billion in 2022, with over $5 billion directed toward oil and gas development, two-thirds of which focused on upstream exploration and production activities.

Through this programme, Algeria seeks to balance the development of oil and gas output with resource preservation, ensuring the sector remains a cornerstone of national revenues and reinforcing the country’s role as a regional energy hub in North Africa.