Eni, Total, Occidental sign $4 billion Algeria oil deal

Italy’s Eni, US major Occidental, France’s Total and Algerian group Sonatrach on Tuesday signed a $4 billion oil and gas production-sharing deal for the Berkine field in the south-east of the country.

Algerian President Abdelmadjid Tebboune, who on Monday hosted his Italian counterpart Mario Draghi, with whom he struck a number of deals, said the 25-year deal would provide Rome with “significant amounts of natural gas” as Europe looked for alternatives looking for Russian deliveries.

The deal aims to produce one billion barrels of oil equivalent, Sonatrach said in a statement.

The partners will “develop additional liquid hydrocarbon resources while reducing the carbon intensity of these fields through a dedicated carbon reduction program,” Total said in a separate statement.

The deal was signed under Algeria’s 2019 hydrocarbon law, which allows production to be shared with foreign partners. It drew heavy criticism from the Algerian opposition and street protests over an alleged sell-off of national resources.

According to an Algerian government source, the North African country will increase its gas exports to Italy by four billion cubic meters in the coming days.

Italy buys most of its natural gas from abroad, with about 45 percent of its imports historically coming from Russia.

But Rome has increasingly looked to Algeria, historically its second largest supplier, to lessen that dependency after Russia’s invasion of Ukraine triggered sanctions against Moscow and pushed up energy prices.

Algeria is Africa’s largest gas exporter, supplying around 11 percent of the natural gas consumed in Europe.