Media: Algeria nears shale gas deals with Exxon and Chevron

Algeria is close to securing agreements with Exxon Mobil Corp. and Chevron Corp. to develop its extensive gas reserves, including shale resources, for the first time, a senior official said.

“The technical aspects have largely been agreed, but commercial terms are still under negotiation and will soon be finalised,” Samir Bekhti, chairman of Algeria’s energy regulator Alnaft, told reporters. He added that attracting the two U.S. oil giants “sends a strong signal” about Algeria’s ambitions.

The North African country is placing significant emphasis on shale development to bolster state revenue. Hydrocarbons currently account for more than three-quarters of Algeria’s exports, and rising domestic energy demand from its population of 47 million is making new investments critical.

“Algeria holds a world-class petroleum system with the potential for significant oil and gas resources,” Chevron said in a statement. “Given our capabilities and experience, we are excited by the prospective synergies and relationship we could create in Algeria.” 

Algeria’s existing gas infrastructure and proximity to Europe make it attractive to foreign investors, though drilling deep in the southern desert entails high costs, even as the potential returns are significant. The U.S. Energy Information Administration ranks Algeria third globally in recoverable shale resources, behind China and Argentina, and ahead of the United States.

With three pipeline connections to Europe, Algeria enjoys logistical advantages over distant suppliers such as Qatar, which rely on liquefied natural gas shipments. Bekhti noted that Algeria hopes to replicate the U.S. shale success, which transformed the country from a net importer to a top exporter.

“The United States did not reach this level of performance overnight. It took them no less than 15 years. For Algeria, it could take less time because the infrastructure, facilities, and pipeline network are already in place,” he said.

For projects near existing infrastructure, Bekhti said preliminary data collection, initial testing, and facility connections could be completed in two to three years.

Algeria possesses some of Africa’s largest oil and gas reserves, but production has long been constrained by mismanagement and underinvestment. Authorities sought to address this through legislation approved in 2019. The Russian invasion of Ukraine last year, which disrupted European gas supplies, has further increased Algeria’s strategic importance as an energy provider.

Last year, state-run Sonatrach signed preliminary agreements with Exxon and Chevron to explore hydrocarbons in the Ahnet basin, site of Algeria’s first trial shale well in 2014, and the Berkine basin in the east. In July, Sonatrach also reached an agreement with China’s Sinopec Group to explore another shale-rich area. “We want to unlock this potential and start working with those who have experience, whether Chinese, American, or European,” Bekhti said.

Executives from Exxon and Chevron met Algerian officials at a Houston forum earlier this year, signaling progress toward finalizing commercial terms.

However, translating shale potential into production remains challenging. Factors such as water availability, reservoir quality, and legal and fiscal conditions have limited shale development outside the U.S. Most of Algeria’s shale lies far from the northern coast and major cities, raising costs. Previous development attempts were shelved in 2016 after protests over potential water contamination.

“We need to master the economic aspects of unconventional energy,” Bekhti said. Studies conducted by Alnaft under the supervision of eight oil companies, including Exxon and Eni SpA, have confirmed the sector’s potential.

Alnaft is also preparing its next bidding round for oil and gas blocks at the end of the first quarter of 2026. The first tender in more than a decade awarded contracts to major players, including Italy’s Eni, France’s TotalEnergies SE, and QatarEnergy.

By Tamilla Hasanova