Italian major Eni has signed a contract to re-launch production in Algeria’s Berkine basin as well as an agreement for decarbonization initiatives.
CEO of Sonatrach Toufik Hakkar and the CEO of Eni Claudio Descalzi inked the deal in the presence of the Minister of Energy and Mines Mohamed Arkab and the Ambassador of Italy to Algiers Giovanni Pugliese. On the same occasion, Eni and Sonatrach signed a memorandum of understanding for cooperation on initiatives in the energy transition.
“Today’s agreements are testimony to the commitment of Sonatrach and Eni to continue the shared strategy of accelerated project development, and to pursue the decarbonization objectives within our common commitment to achieve carbon neutrality,” Eni’s CEO Descalzi said.
Algerian oil law
The contract, is the first-ever signed under the aegis of the new Algerian oil law. It covers an area of around 3,040 square miles in the southern part of the Berkine basin, close to the company’s current production assets – Menzel Ledjemet Est and the Central Area Field Complex, already operated by the Eni-Sonatrach joint venture.
The Berkine deal revolves around an exploration and development program in the area which, in the first phase, envisages the fast-tracked development of reserves estimated at 135 million barrels of oil equivalent, with a start-up of production expected by the end of 2022.
Eni stated that this project would enhance synergies with existing plants and that the entry into force of the new contract was subject to approval by Algerian authorities. Intending to build on the cooperation already in place in the technological field and to continue the decarbonization process undertaken in support of the initiatives towards carbon neutrality, Eni and Sonatrach have also signed a memorandum of understanding with a strategic value for cooperation in the energy transition sector.
The agreement provides for the assessment of joint opportunities in the fields of renewables, hydrogen, the capture, use, and storage of CO2, bio-refining, and many other initiatives in line with the decarbonization objectives of both companies.
According to Eni, this agreement is in line with its commitment to achieving carbon neutrality by 2050, consolidating the partnership with Sonatrach for sustainable development and jointly tackling the energy transition challenges. Eni has been present in Algeria since 1981 where it is the operator of various mining permits. With an equity production in the country of 95,000 barrels of oil equivalent per day, Eni is the most important international company operating in the country.