Sinopec signs $850 million exploration deal with Algeria's Sonatrach

China Petroleum and Chemical Corporation (Sinopec), the state-run exploration and refining giant, has signed an $850 million contract with Algerian oil company Sonatrach for exploration and development of hydrocarbon deposits in the North African country.

Sinopec International Energy secured a production sharing contract (PSC) covering the Hassi Berkane North licence in Algeria, which lies 80 kilometres form the huge Hassi Messaoud field.

The two companies have agreed to carry out exploration and appraisal drilling on the licence,

Sonatrach is also in discussions with seven international companies for exploration and development of the country’s oil and gas reserves, the company’s CEO Rachid Hachichi said during the signing of the agreement with Sinopec.

The list includes Italy's Eni, France's Total, US's Chevron and ExxonMobil as well as a Swedish company, Algerian state news agency quoted him as saying.

The PSC agreement comes almost a year after the Sinopec and Sonatrach entered into a memorandum of understanding on the matter in March 2024.

Sinopec has been present in Algeria since 2002 and operates the Zarzaitine field.

Besides oil and gas exploration, Sinopec has started the second phase of its rural well-drilling project in Senegal. The first phase, launched in 2017, already delivered daily water supply of 110,000 cubic meters. 

Under phase two, Sinopec plans to build 85 wells, 89 water towers, 1,450 kilometers of pipelines, and 300 centralised water distribution stations. This will provide a reliable water supply to more than 2 million rural residents.