Italy's Eni, Algerian state oil company Sonatrach and Total signed two agreements that include an exclusive partnership for offshore exploration "in a virtually unexplored geological province" of Algeria, Eni announced Monday.
The agreements were signed during the Algeria Future Energy Summit in capital Algiers, according to a statement from the Italian energy group.
"In parallel, Eni and Total will also pursue obtaining exploration permits that will allow for the rapid completion of the hydrocarbon potential assessment," the press release read.
Eni's CEO Claudio Descalzi said: "Together with Sonatrach and Total, we will have the opportunity to explore the deep waters of the Algerian offshore, a virtually unexplored geological province where Eni will be able to contribute by leveraging its experience in the Eastern Mediterranean and its inventory of advanced exploration technologies."
According to the statement, Eni has been present in Algeria since 1981 and currently holds 32 mining permits with an equity production in the country of 90,000 barrels of oil equivalent per day, making the company the country's main international player.
- Eni further strengthens presence in Algerian North Berkine basin
The summit in Algiers also saw Eni and Sonatrach sign an agreement that will see Eni take a 49 percent stake in three oil concessions in the onshore North Berkine basin located in the Algerian desert.
The Sif Fatima II, Zemlet El Arbi and Ourhoud II licenses cover a total area of 8,500 square kilometers, according to a separate press release from Eni. Sonatrach will retain the remaining 51 percent stake.
Under the agreement, which is subject to approval by the Algerian authorities, Eni and Sonatrach will carry out an exploration program in order to develop the reserves of the three blocks, estimated at 145 million barrels of oil equivalent. Production is expected to start by the end of 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. These include a 180 km-long gas pipeline that is being fast-tracked and will connect the oil fields of Bir Rebaa North and Menzel Ledjmet East," the statement read.
Descalzi said the agreement further confirmed the strategic importance of Algeria where Eni has planned significant investments over the next few years.
"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," he said.
By Hale Turkes