Investment in Hydrocarbons in Algeria: Italy Aims to Go All Out

Indeed, Italy, which is seeking to secure its gas supplies – in particular by reducing its dependence on Russia and safeguarding itself against disruptions in the Middle East in the wake of the war waged against Iran by the Zionist entity and the United States – has decided to rely more heavily on Algeria.

The two oil and gas giants, Italy’s Eni and Sonatrach, will therefore be making ‘major’ investments in the future, exploring new offshore fields in the Mediterranean Sea (on the Algerian side) and unconventional gas (shale gas).

“We have decided to strengthen our already very solid cooperation through our national champions, the Italian company Eni and the Algerian company Sonatrach, by working on new fronts such as shale gas and offshore exploration,” Ms Meloni announced in a joint statement to the press following a meeting with the President of the Republic, Abdelmadjid Tebboune.

This announcement reflects Rome’s commitment to stepping up its energy cooperation with Algiers by increasing its investment in this strategic sector in Algeria, whilst ensuring technology transfer in the field of unconventional energy sources (offshore and shale gas).

"This new plan will help to 'boost gas supplies from Algeria to Italy'," added the head of government, whose country relies on Algeria for more than 30% of its natural gas consumption.

Most of this natural gas is transported via a pipeline known as Transmed, which is already operating at full capacity, according to experts contacted by AFP, and in liquefied natural gas (LNG) by LNG carriers.

Algeria has enormous potential, which requires state-of-the-art technical resources to protect the environment – an issue to which Algerian legislation attaches great importance.

Rise to the challenge

This is a challenge that the Italian giant ‘Eni’ is preparing to take on alongside the national company ‘Sonatrach’, which has consistently supported the increase of gas flows to Europe as a whole. Algeria has set just one condition: that investment be made in the oil and gas sector, particularly as 60% of the country’s territory remains unexplored, covering more than 1.5 million km².

The country is currently working, through Sonatrach and Alnaft, to confirm its recoverable reserves before launching an international call for expressions of interest in developing these resources in the very near future.

In addition to this study being carried out by the oil services company SLB, results expected to be released shortly, the Alnaft agency has also signed an agreement with the US group Chevron to identify the hydrocarbon potential of the Algerian coast.

As for shale gas, Algeria has an estimated reserve of nearly 700,000 billion cubic metres that has not yet been exploited. So the potential is there; we need to go all out by stepping up exploration for new gas fields.

Moreover, President Tebboune confirmed Algeria’s commitment to honouring its pledges, “given that we are a strategic and trusted partner of Italy and Europe in general”.

Although the Italian Prime Minister did not provide any financial details regarding potential investments that Eni and Sonatrach might make in natural gas exploration and production, both parties are determined to work together to boost Algeria’s gas production, aiming to reach 200 billion cubic metres of gas by 2030.

To this end, the state-owned group has set aside $60 billion for the next five years, with 70% of this budget earmarked for exploration and increasing production.

In addition to the extension of the Transmed gas pipeline, Rome is following the green hydrogen corridor with “great interest”; this hydrogen is produced thanks to the more than 3,000 hours of sunshine Algeria enjoys each year.

According to the same report, this project could generate annual exports of between €5.6 and €9.4 billion, turning Algeria into an ‘integrated energy hub’.