Algeria energy investment accelerates with $5.4bn Saudi deal and $60bn five-year plan

Tuesday 4th November 2025

by inAfrika Newsroom

Algeria energy investment is moving at pace. Sonatrach signed a $5.4 billion production-sharing deal with Saudi Arabia’s Midad Energy to develop Illizi Basin blocks over 30 years. Moreover, the contract includes a seven-year exploration phase and targets 993 million barrels of oil equivalent, including 125 bcm of gas.

The push follows a $1.35 billion Sonatrach–Eni agreement in July for the Berkine Basin, projected at 415 million boe. In addition, Energy Minister Mohamed Arkab said Algeria plans to invest $60 billion in 2025–2029, with 80% for upstream. Consequently, officials frame new gas and liquids as anchors for exports and fiscal stability.

Italy remains the key market. Eni says capacity along TransMed can rise as Algerian output and contracts expand. Therefore, Rome’s diversification away from Russian gas keeps channeling capital toward Algerian fields and pipelines.

However, timing and costs still matter. Global analysts expect a looser oil market into 2026, which can pressure upstream economics. At the same time, Algeria is racing to cut flaring and add renewables, while keeping gas flowing to Europe’s power and industry.

Why it matters: Algeria energy investment helps steady European gas supply while shoring up Algeria’s budget. Consequently, stable pipeline volumes through TransMed lower price risk for Italy and support FX inflows for Algiers. For Africa, the signal is clear: upstream deals are returning to North Africa as Europe seeks predictable supply.

Execution is the test. Authorities must hold project schedules, clear payments to contractors, and publish reliable data on field performance. Moreover, faster permitting for gathering systems, compressors, and export links will decide whether the 2025–2029 plan hits targets. If those pieces hold, Algeria can defend market share and finance its non-hydrocarbon agenda.