Exxon has signed a deal with the Algerian government for exploration at two natural gas fields in the North African country.
The supermajor, in partnership with Algeria's state energy firm Sonatrach, will "study the existing opportunities to develop the hydrocarbon resources in the Ahnet basin and the Gourara basin" in the southern part of the country, the New Arab reported.
Details about the amount of the investment were not disclosed by the companies. Information about the potential resources in the two basins was also not disclosed. The agreement is preliminary but it could become a firm commitment if exploration work yields positive results.
Algeria is a large natural gas producer and wants to become an even larger one. Talks about the participation of U.S. supermajors in this expansion emerged last year when the Wall Street Journal reported that Exxon and Chevron were in advanced talks on exploration and production deals in the North African nation.
By early 2024, there was still no news of a deal but it appears that now talks have finally produced a result with one of the U.S. supermajors.
Algeria holds huge conventional natural gas reserves, and it is also estimated to have the third-largest shale gas reserves in the world after China and Argentina.
Most of Algeria's gas exports are heading to Europe, which is increasingly betting on Africa to import large volumes of pipeline gas and LNG to replace pipeline gas supply from Russia, which was Europe's top gas supplier before the Russian invasion of Ukraine.
Italy's energy major, Eni, has been particularly active in securing more natural gas supply for Europe from Africa and has fast-tracked projects in Africa to meet Europe's gas demand in the absence of Russian pipeline deliveries.
Earlier this year, the biggest LNG import terminal, in the UK, secured a 10-year gas supply deal with Algeria's Sonatrach.
By Irina Slav for Oilprice.com
Irina is a writer for Oilprice.com with over a decade of experience writing on the oil and gas industry. More
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