Algerian state-owned oil company Sonatrach and Saudi Arabia's Midad Energy North Africa have signed a production-sharing contract (PSC), worth around $5.4bn (AD704.08bn), focused on oil and gas exploration in Algeria's Illizi Basin.  

The agreement covers the Illizi South perimeter, located approximately 100km from the town of In Amenas, near the Libyan border. 

Signed under Algeria’s hydrocarbon law no. 19-13, the PSC has a 30-year span with an option for a ten-year extension and includes a seven-year exploration phase. 

Midad Energy North Africa will finance the entire investment, including $288m (SR1.08bn) for exploration efforts. 

Over the life of the contract, production from the Illizi South perimeter is projected to reach 993 million barrels of oil equivalent (mboe). 

This will include 125 billion cubic metres of gas and 204 million barrels (mbbl) of liquid hydrocarbons, comprising 103mbbl of liquid petroleum gas and 101mbbl of condensate. 

Sonatrach said the project would leverage advanced technological and digital solutions to meet Algeria's environmental regulations. 

Algeria, a member of OPEC, aims to strengthen its position as a global energy supplier while addressing domestic energy needs. 

Midad Energy is a part of Saudi Arabia’s Alturki Holding and invests in industrial and energy services including upstream oil and gas operations. 

Sonatrach, a major player in Algeria's oil and gas sector, is actively pursuing foreign partnerships to enhance production and modernise its infrastructure. 

The company has been working with global partners and recently signed a $850m (6.07bn yuan) contract with China's Sinopec for hydrocarbon development and exploration. 

In July, Sonatrach formalised a 30-year contract with Eni for the exploration and development of the Zemoul El Kbar perimeter within Algeria’s Berkine Basin. 

Recently, Algeria announced plans to invest $60bn in its energy sector over the next five years, with a focus on upstream exploration and production.