Eni has of today, signed a new oil contract with Sonatrach, expanding its strategic partnership in Algeria since it started operations three decades ago. The contract relates to Eni’s onshore operation at the Berkine basin area.
The Chief Executive Officer of Sonatrach, Toufik Hakkar, and the Chief Executive Officer of Eni, Claudio Descalzi, in the presence of the Minister of Energy and Mines Mohamed Arkab and the Ambassador of Italy to Algiers Giovanni Pugliese, signed the contract.
On that account, the two partners also signed a memorandum of understanding (MoU) for cooperation on initiatives in the energy transition.
Eni’s CEO Claudio Descalzi commented: “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 decarbonisation objectives within our common commitment to achieve carbon neutrality”.
The contract, which is the first of its kind, signed under the auspices of the new Algerian oil law, covers an area of 7,880 km2 in the southern part of the Berkine basin. The area is in close proximity to the company’s current production assets, Menzel Ledjemet Est (MLE) and Central Area Field Complex (CAFC), already operated by the Joint Venture (JV) Eni-Sonatrach.
New Contract to Enhance Synergies with Existing Plants
Descalzi and Hakkar were positive about their commitment to create an ambitious exploration and development program in the area. In the first phase, the project 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.
In a press statement released by Eni, the project is expected to enhance synergies with existing plants. Meanwhile, the entry into force of the new contract is subject to approval by the competent Algerian authorities.
With a view to building on the cooperation already in place in the technological field and to continue the decarbonisation process undertaken in support of the initiatives towards carbon neutrality, Eni and Sonatrach have also signed a memorandum of understanding.
This agreement has a strategic value for both companies in the energy transition sector. It adds to a number of MoUs Eni has underwritten with other companies in order to shore up its footprint in the energy transition space.
Also, it 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 companies’ respective decarbonisation objectives.
“This agreement is in line with Eni’s commitment to achieving carbon neutrality by 2050, consolidating the partnership with Sonatrach for a sustainable development and to jointly tackle the energy transition challenges.”Eni SpA
Eni’s presence in Algeria has been one that has improved its portfolio and this new contract would add to its asset base. Regarding the JV between the two partners, Eni holds the majority share.
With an equity production in the country of 95,000 barrels of oil equivalent per day, Eni remains the biggest international company operating in the country and thus contributes hugely to the country’s development.