Algeria is in talks with the U.S. oil giant ExxonMobil to boost its oil and gas output, according to an energy ministry statement on Tuesday. The statement said that a deal is expected to be reached in the next few days.
The North African country, which is a member of the Organization of the Petroleum Exporting Countries (OPEC), has been struggling to attract foreign investors to its energy sector amid political and economic turmoil. Algeria relies heavily on oil and gas revenues, which account for about 60% of its budget and 94% of its total exports, according to the World Bank.
The energy ministry said that ExxonMobil and other American companies are expected to invest in Algeria’s energy sector, following the example of Occidental Petroleum, which acquired Anadarko’s assets in Algeria in 2023. The statement did not provide any details on the potential size or scope of the investments.
ExxonMobil did not immediately respond to a request for comment.
Algeria has been trying to reform its energy sector and attract more foreign partners to increase its production and reserves. The country’s oil output is currently around 1 million barrels per day (bpd), while its gas output is 106 billion cubic meters per year, according to figures released by the state-owned oil and gas company Sonatrach.
In 2023, Algeria passed a new hydrocarbon law that aimed to improve the fiscal and contractual terms for foreign investors and simplify the bureaucratic procedures. The law also allowed Sonatrach to establish joint ventures with foreign companies without the approval of the energy ministry.
However, the law has not yet yielded significant results, as the country faces political uncertainty and social unrest. Algeria has been undergoing a pro-democracy movement since 2023 when mass protests forced former President Abdelaziz Bouteflika to resign after 20 years in power. The movement, known as Hirak, has continued to demand more political and economic reforms and an end to corruption and military influence.
Algeria also faces security challenges in the region, as it shares borders with Libya, Mali and Niger, where armed groups and militants operate. Algeria has been a key mediator in the Libyan conflict and a supporter of the UN-backed government in Tripoli.
Despite the challenges, Algeria remains one of the largest oil and gas producers and exporters in Africa and a major supplier of gas to Europe. The country has proven oil reserves of 12.2 billion barrels and gas reserves of 4.5 trillion cubic meters, according to the BP Statistical Review of World Energy 2023.
Algeria hopes that by partnering with ExxonMobil and other international companies, it can revitalize its energy sector and diversify its economy. The country also has potential in renewable energy, especially solar and wind power, which it plans to develop in the coming years.
Source: Reuters
