Summary:

On 20 July 2025, Algeria’s state-owned oil company, Sonatrach, and China’s Sinopec signed a Memorandum of Understanding (MOU) setting the stage for future hydrocarbon contracts in the Gourara and East Berkine basins.

The MOU was signed by Sonatrach’s Vice President for Business Development and Marketing, Ferhat Ounoughi, and Sinopec Overseas Oil and Gas Limited CEO, Wu Xiuli, under the supervision of Algeria’s Minister of Energy, Mines and Renewable Energies, Mohamed Arkab.

The signing was hailed by both sides as a strategic milestone. Sonatrach CEO Rachid Hachichi characterized it as a “new and constructive” step that builds on a history of cooperation and reflects a convergence of vision regarding the responsible and technically sound development of Algeria’s energy resources. He stressed that the agreement aligns with Sonatrach’s broader strategy to expand strategic partnerships, foster innovation, and reinforce Algeria’s energy production capacity.

Echoing that sentiment, Sinopec’s leadership described the agreement as a “decisive turning point” in bilateral cooperation. The Chinese firm affirmed its commitment to contributing technical expertise to Algeria’s energy sector and expressed interest in localizing parts of the energy value chain by jointly exploring manufacturing opportunities for oil and gas sector equipment.

The agreement also received support from the African Energy Chamber (AEC), which praised it as a model of cross-border collaboration that blends international know-how with African resource leadership. The AEC emphasized that such partnerships are vital to unlocking untapped energy reserves, boosting investment, and strengthening Africa’s upstream energy landscape.

Outlook: 

As Algeria looks to modernize its hydrocarbon sector and expand production capacity, the Sonatrach–Sinopec agreement signals a deeper strategic alignment that could shape future investment flows from China to North Africa.

The deal reflects China’s sustained interest in Algeria’s energy market and may pave the way for more integrated cooperation, particularly in upstream development and joint project execution.

This renewed cooperation underscores Algeria’s position as a strategic player in the Mediterranean energy market, especially as it continues to expand gas supply to Europe and deepen partnerships with international companies.

Building on a long history of collaboration, the agreement signals continued confidence in Algeria’s resource base and regulatory stability, with the potential to further strengthen the country’s role in regional and global energy dynamics through the evaluation and development of significant energy resources.

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