Executives of Italy’s Eni SPA and Algeria’s Sonatrach signed an agreement that will see Eni take a 49% stake in three oil concessions in the onshore North Berkine basin in the Algerian desert.
The agreement will cover three areas: Sif Fatima II, Zemlet El Arbi, and Ourhoud II. Sonatrach will retain a 51% stake.
The licenses cover a total area of 8,500 sq km. Eni has been operating in the area since 1981 and all its current production assets are located there, including Bir Rebaa North (BRN) field, from where Eni began producing oil in the country in 1995.
Eni and Sonatrach will carry out an exploration program to develop the reserves of the three blocks, estimated at 145 million boe. Production is expected to start by yearend 2020.
The development will benefit from synergies with existing facilities in the area, as well as new projects and infrastructure that are currently under construction, the company said. These include a 180-km natural gas pipeline that is being fast-tracked and will connect BRN and Menzel Ledjmet East fields.
Eni Chief Executive Officer Claudio Descalzi said, “With Sonatrach, we will work together to position North Berkine basin as a gas hub. The country still has a lot of gas and Eni will leverage its technology and skills to develop it.”