Algeria has concluded a $1 billion-plus agreement to expand the Hassi Bir Rekaiz oilfield, as it steps up efforts to increase production, grow exports, and reinforce its standing in the international energy sector.
The engineering, procurement and construction (EPC) contract was awarded on Tuesday by state energy firm Sonatrach to a consortium comprising Egypt’s Petrojet, Italy-based Arkad, and Thailand’s PTT Exploration and Production, which already operates the field jointly with Sonatrach.
The project will mark the second development phase of the Hassi Bir Rekaiz oilfield located in the Berkine Basin in southeastern Algeria, a key oil and gas hub close to the borders with Libya and Tunisia.
As part of the plan, the consortium will build a crude processing facility capable of handling about 31,500 barrels per day, along with gas treatment systems and produced water infrastructure. Completion is expected within 39 months.
The expansion aligns with Algeria’s wider strategy to ramp up hydrocarbon output amid rising global competition for energy supplies.
Production at Hassi Bir Rekaiz started in 2022 after an initial development phase launched in 2019, which increased output to around 17,000 barrels per day.
Authorities now plan to lift production to roughly 30,000 barrels daily by 2029, with longer-term ambitions of reaching 60,000 barrels per day.
Additional works under the project include drilling new wells and developing transport systems to improve recovery efficiency and operational performance.
The agreement also reflects Algeria’s push to attract more foreign investment and deepen partnerships with global energy firms in its oil and gas sector.
In a parallel move, Sonatrach signed a memorandum of understanding with the Egyptian General Petroleum Corporation to cooperate on the marketing of crude oil and petroleum products.
Energy Minister Mohamed Arkab and Egyptian Petroleum Minister Karim Badawi attended the signing ceremony, describing the agreements as a sign of strengthening economic ties between African and Arab nations.
The development also supports Algeria’s ambition to position itself as a key energy supplier to Europe, especially after the Russia-Ukraine conflict reshaped global energy trade and increased Europe’s demand for alternative sources.
Already one of Africa’s major natural gas exporters, Algeria supplies Europe through pipelines connected to Spain and Italy, while also accelerating upstream investments and reforming its energy sector to attract international investors.
Officials are also promoting the upcoming “Algeria Bid Round 2026” licensing process to open additional oil and gas assets to foreign companies.
Overall, the Hassi Bir Rekaiz expansion is expected to boost export earnings and reinforce Algeria’s competitiveness in the global energy market.