ALGIERS, February 24, 2026 — Algeria's state energy giant Sonatrach has outlined the most ambitious capital expenditure programme in its six-decade history, committing up to $60 billion over the 2026–2030 period to dramatically accelerate exploration, bolster production, and modernize its downstream infrastructure.

The plan, formally endorsed at Sonatrach's General Shareholders' Meeting on December 25, 2025, and publicly detailed by CEO Noureddine Daoudi on February 24 — the anniversary of Algeria's 1971 hydrocarbon nationalization — signals a decisive strategic shift as the country races to replenish maturing reserves and meet growing domestic and European energy demand.

Upstream First: 75% of Budget for E&P

Exploration and production will absorb the lion's share of spending, accounting for 75% of total development investments through 2030, according to Daoudi. Approximately $48 billion — or 80% of the total budget — is directed to upstream activities alone.

At the heart of the plan is a "colossal" exploration programme covering 66% of Algeria's national hydrocarbon mining domain, including the drilling of approximately 500 exploration wells backed by extensive 3D and 2D seismic acquisition campaigns. On the production side, the plan calls for the drilling of around 950 development wells and the completion of some 6,300 operations on existing wells to sustain output at aging fields.

"The Sonatrach Group attaches paramount importance to exploration and production, which is considered vital for any oil and gas company," Daoudi stated in an interview with the official Algerian news agency APS.

Reversing Reserve Decline

The urgency behind the plan is clear. Algeria controls nearly 13 billion barrels of recoverable oil reserves, but at current production levels — without significant new discoveries — those reserves could be exhausted within 30 years, according to official estimates. Output from Hassi R'Mel, one of Africa's largest gas fields and a cornerstone of Algeria's export volumes, has been declining from mature sections.

Sonatrach currently exports approximately 52 billion cubic meters (bcm) of gas per year and has set a target of 60 bcm by 2030, a goal that hinges on the success of this investment drive. Algeria's proven gas reserves stand at 159 trillion cubic feet, ranking 11^th globally, and its technically recoverable shale gas reserves — estimated at 707 trillion cubic feet — are the third-largest in the world after China and Argentina, though no commercial shale production has yet commenced.

International Partnerships Play a Key Role

Sonatrach is not going it alone. Some 26% of the overall E&P investment budget is earmarked for international partnerships, reflecting the scale of capital and technical expertise required. The company's CEO noted that 2025 was marked by the conclusion of eight new hydrocarbon contracts with major international companies under Algeria's Hydrocarbon Law 19-13.

Recent landmark deals underscore the momentum: a $5.4 billion contract with Saudi Arabia's Midad Energy for exploration and exploitation in the Illizi South region was signed in October 2025, and an $850 million agreement with China's Sinopec for hydrocarbon development in northern Algeria followed in early 2025. Discussions with other majors — including ExxonMobil and TotalEnergies — remain ongoing under various memoranda of understanding.

Early movers on the downstream engineering and construction side include Technip Energies and Samsung Engineering, already positioned on EPC contracts.

Downstream: A $7 Billion Modernization Drive

The remaining 20% of the budget — roughly $7 billion — targets refining and petrochemicals. Key downstream projects include:

• A new 5 million metric ton/year refinery at Hassi Messaoud, expected to begin operations in 2027
• A naphtha cracking unit in Arzew with 1.2 million metric tonnes/year of gasoline production capacity
• An MTBE plant, already 86% complete as of February 2026 and on track for gradual commissioning by June 2026
• Expansion of petrochemical capacities to reduce product imports and generate new export streams

A New Licensing Round on the Horizon

A new licensing round offering additional exploration blocks — targeting both conventional and unconventional plays — is expected in the first half of 2026, a critical test of how strongly international oil companies respond to Algeria's renewed openness. Algeria granted exploration licences to five international groups in June 2025, and Sonatrach says discussions with further partners are continuing.

"This major medium-term investment plan aims to maintain and renew our hydrocarbon reserves base, which will enable us to respond favourably to the national market's energy product needs, support the major structural projects initiated by our country, and strengthen our market share and our position as a secure and reliable partner for our international customers," Daoudi said.

With hydrocarbons accounting for the vast majority of Algeria's export revenues, the success of this $60 billion gamble is not merely a corporate matter — it is a national imperative.

Sources: Sonatrach / APS (Feb 24, 2026), Algiers Brief, Algeria Invest, Middle East Online, MEXC News, Dispatch Risk, Rus-Alg, Stimson Center.