Sonatrach Signs Strategic Deals to Advance Hassi Bir Rekaiz Development and Egypt Energy Trade

By Dr. Hana Saada

Algeria’s state energy group Sonatrach on Tuesday signed two agreements aimed at expanding upstream capacity and strengthening regional energy cooperation.

The first is an engineering, procurement and construction (EPC) contract awarded by the Sonatrach–PTT Exploration and Production partnership to a consortium comprising Petrojet and Arkad for phase two of the Hassi Bir Rekaiz (HBR) field in the Berkine basin, spanning El Oued and Ouargla.

The project covers full EPC scope and commissioning for the field’s second development phase, including construction of a crude processing unit with capacity exceeding 31,500 barrels per day, alongside associated gas and produced-water treatment infrastructure. Execution is set at 39 months, with total investment estimated at $1.087bn, of which 31.8% will be sourced locally.

Hassi Bir Rekaiz is one of Algeria’s key upstream projects. Its first phase, launched in 2019 under the Sonatrach–PTT partnership, targets initial production of around 13,000 barrels per day.

Separately, Sonatrach signed a memorandum of understanding with Egyptian General Petroleum Corporation to pave the way for future contracts covering crude oil and refined product sales to Egypt.

Algerian Minister of State for Hydrocarbons Mohamed Arkab said the agreements align with Sonatrach’s strategy to expand production capacity and enhance resource valorisation through balanced partnerships combining domestic capability with international expertise.

He added that the deals come amid a more attractive investment framework under recent legal reforms, including updated hydrocarbons and investment laws, and invited foreign partners—particularly Egyptian firms—to participate in upcoming opportunities such as the “Algeria Bid Round 2026”.

Sonatrach chief executive Noureddine Daoudi said the agreements reflected the strength of existing partnerships and mutual trust, while supporting local content, technology transfer and national expertise development.

Egypt’s Petroleum Minister Karim Ibrahim Ali Badawi described the partnership as a step towards deeper cooperation, particularly against the backdrop of global energy pressures, adding that the memorandum would help generate further value.

The twin agreements underline Algeria’s push to scale output while leveraging regional partnerships to expand market reach.