KEY POINTS
- Algeria is in advanced talks with Exxon and Chevron to launch its first shale gas projects.
- Technical terms are largely settled, with commercial agreements expected soon, according to regulator Alnaft.
- Shale development could boost European energy security and solidify Algeria’s role as a top gas supplier.
In a move that could transform the North African country’s energy landscape and increase its export power, Algeria is nearing agreements with Exxon Mobil Corp. and Chevron Corp. that could pave the way for the first time to access its enormous shale gas resources.
Most technical terms have already been agreed upon, according to Samir Bekhti, chairman of energy regulator Alnaft, and commercial negotiations are currently nearing their conclusion. In an interview, Bekhti stated, “The commercial alignment is still under negotiation and will soon be finalized, but the technical aspects have more or less been agreed upon.”
Securing commitments from the two American majors, he continued, “sends a strong signal” to the international market about Algeria’s appeal as an investment destination.
The potential agreements coincide with Algeria’s efforts to increase natural gas production in order to satisfy the growing demand in Europe, especially after Russian supplies were cut.
The nation has long been interested in its unconventional gas potential and is currently one of the top suppliers to southern Europe. However, due to high development costs, environmental concerns, and the requirement for advanced drilling technology, the project has been delayed.
Shale Gas Seen as Strategic Hedge for Europe
Algeria’s shale gas development has the potential to revolutionize the industry. After Argentina and China, the US has the third-largest technically recoverable shale gas resources in the world, according to the US Energy Information Administration. Algeria’s foray into the shale market may offer Europe, which is still frantically trying to diversify its energy imports, an extra supply buffer.
According to Bekhti, discussions with Exxon and Chevron cover infrastructure planning, capital investment, and access to extensive technical knowledge. Industry analysts anticipate that, subject to final agreements and regulatory approvals, initial exploration and pilot projects could start within the next two to three years, even though no production timeline has been announced.
International oil companies have been quietly re-engaging with Algeria since the government reformed its hydrocarbons law in 2019, offering more competitive fiscal terms and reducing red tape. For Algiers, these partnerships are part of a broader push to cement its role as a long-term, reliable gas supplier while balancing domestic consumption needs.
