Algeria Signs Oil and Gas Study Deals with Occidental Petroleum to Boost Exploration Potential
Algeria has strengthened its partnership with U.S. energy giant Occidental Petroleum by signing two study agreements aimed at assessing oil and gas reserves in the country’s south.
The deals, announced by Alnaft, Algeria’s National Agency for Hydrocarbon Resources Valorization, cover El Ouabed and Dahar, two promising regions in southern Algeria.
Assessing New Hydrocarbon Potential
According to Alnaft, the agreements will allow both parties to conduct technical and geological studies to evaluate resource availability and development feasibility.
“By signing these two study agreements, Alnaft and Occidental Petroleum demonstrate their commitment to jointly advancing the assessment and development of Algeria’s hydrocarbon resources,” the agency said in a statement published by local media.
These agreements mark the initial stage of cooperation and do not yet authorize direct extraction. Instead, the studies will determine whether large-scale investments are viable.
Strategic Importance for Algeria
Hydrocarbons remain the backbone of Algeria’s economy:
Between 2019 and 2023, they accounted for 83% of total exports.
Nearly 47% of budget revenues came from the sector, according to World Bank data.
However, with oil revenues expected to decline, Algeria forecasts a budget deficit of 14.5% of GDP in 2025, up from 13.9% in 2024. This makes each potential new field critical for the country’s fiscal stability.
The timing is significant as well: the International Energy Agency (IEA) projects that global oil supply will outpace demand in 2025. The IEA recently cut its oil demand growth forecast to 730,000 barrels per day, citing weaker consumption in China and the U.S. as well as trade tensions.
Strengthening International Partnerships
Through this partnership, Occidental Petroleum deepens its footprint in Algeria’s energy sector, while Algerian authorities continue to expand international cooperation to attract foreign capital and advanced technology.
If the studies confirm significant reserves, the projects could:
Draw major foreign investment,
Strengthen Algeria’s oil services industry,
Generate new revenues for the state budget.
Aligned with Algeria’s $50 Billion Energy Plan
These initiatives are consistent with Algeria’s $50 billion investment plan, announced in December 2024, which earmarks 71% of funds for exploration and production projects.
For Algeria, the Occidental study agreements represent a strategic step toward securing future hydrocarbon supplies and economic resilience.
