Algeria, June 20, 2025
As part of a major tender for the development of the Zerafa II gas block located in southern Algeria, the Chinese independent company Zhongman Petroleum and Natural Gas Group (ZPEC) has emerged as the winner. According to the results of the competition held by the national agency ALNAFT, the Chinese bid was recognized as the most advantageous. Among the participants were leading European energy players, including TotalEnergies and the ENI–Equinor consortium, whose proposals were less competitive in terms of overall conditions and expected implementation efficiency.
Zerafa II is a major gas-bearing area covering over 38,000 square kilometers in the Tindouf region near the Mauritanian border. Although the contract with ZPEC has not yet been signed, the tender results have been officially confirmed, and the legal procedures are expected to be finalized in the coming weeks.
The selection of a Chinese contractor reflects Algeria's strategic course toward diversifying its international energy partnerships. Since 2022, the country has been actively expanding its pool of foreign economic partners, prioritizing projects that are independent of political conditions and sanction-related risks. In this context, ZPEC’s entry into the Algerian market symbolizes a shift in emphasis toward partnerships with Asian countries, the Middle East, and BRICS nations.
ZPEC is a Chinese-capital drilling and engineering company listed on the Shanghai Stock Exchange. It has previously operated in Iraq, Kazakhstan, and other Central Asian countries, and today stands as one of the most dynamically developing independent contractors in the Asian oil and gas sector. In Algeria, ZPEC is not acting as a full-cycle operator, but rather as a technological partner with access to resources and the support of Chinese national development institutions.
Algeria holds the largest proven natural gas reserves in Africa — over 4.5 trillion cubic meters — and ranks 13th globally in this indicator. A reduced export focus on the European Union and a 31% decline in hydrocarbon revenues in 2024 — coupled with a budget deficit rising to 14.5% of GDP — have prompted the Algerian government to accelerate reform of its foreign economic partnership model. Under these conditions, Algeria seeks investors capable of ensuring the long-term sustainability of projects without geopolitical reservations.
The deal with ZPEC also has a broader context. It underscores Algeria’s ambition to build a multilateral energy architecture involving countries of the Global South and its readiness to open access to strategic resources to independent companies capable of providing flexibility, investment, and localization of expertise.
For Russia, this development presents both a challenge and an opportunity. On one hand, the growing presence of Chinese players in the Algerian market intensifies competition in a region where Russia has traditionally maintained strong positions. On the other hand, the deal could serve as a starting point for Russian-Chinese technological cooperation — especially in engineering services, geological exploration, and integrated project support.
The Algerian side, in turn, emphasizes the importance not only of attracting capital but also of creating domestic value chains, including workforce training, equipment localization, and the development of technological partnerships. This opens opportunities for participation by a wide range of companies, including from Russia.
The Russian-Algerian Business Council views this deal as a positive signal of Algeria’s investment appeal and as confirmation of the country’s shift toward open and diversified economic engagement. Given the strategic nature of Russian-Algerian relations, it is advisable for Russian companies to strengthen their position in Algeria’s new energy initiatives — both individually and through trilateral partnerships.
As part of a major tender for the development of the Zerafa II gas block located in southern Algeria, the Chinese independent company Zhongman Petroleum and Natural Gas Group (ZPEC) has emerged as the winner. According to the results of the competition held by the national agency ALNAFT, the Chinese bid was recognized as the most advantageous. Among the participants were leading European energy players, including TotalEnergies and the ENI–Equinor consortium, whose proposals were less competitive in terms of overall conditions and expected implementation efficiency.
Zerafa II is a major gas-bearing area covering over 38,000 square kilometers in the Tindouf region near the Mauritanian border. Although the contract with ZPEC has not yet been signed, the tender results have been officially confirmed, and the legal procedures are expected to be finalized in the coming weeks.
The selection of a Chinese contractor reflects Algeria's strategic course toward diversifying its international energy partnerships. Since 2022, the country has been actively expanding its pool of foreign economic partners, prioritizing projects that are independent of political conditions and sanction-related risks. In this context, ZPEC’s entry into the Algerian market symbolizes a shift in emphasis toward partnerships with Asian countries, the Middle East, and BRICS nations.
ZPEC is a Chinese-capital drilling and engineering company listed on the Shanghai Stock Exchange. It has previously operated in Iraq, Kazakhstan, and other Central Asian countries, and today stands as one of the most dynamically developing independent contractors in the Asian oil and gas sector. In Algeria, ZPEC is not acting as a full-cycle operator, but rather as a technological partner with access to resources and the support of Chinese national development institutions.
Algeria holds the largest proven natural gas reserves in Africa — over 4.5 trillion cubic meters — and ranks 13th globally in this indicator. A reduced export focus on the European Union and a 31% decline in hydrocarbon revenues in 2024 — coupled with a budget deficit rising to 14.5% of GDP — have prompted the Algerian government to accelerate reform of its foreign economic partnership model. Under these conditions, Algeria seeks investors capable of ensuring the long-term sustainability of projects without geopolitical reservations.
The deal with ZPEC also has a broader context. It underscores Algeria’s ambition to build a multilateral energy architecture involving countries of the Global South and its readiness to open access to strategic resources to independent companies capable of providing flexibility, investment, and localization of expertise.
For Russia, this development presents both a challenge and an opportunity. On one hand, the growing presence of Chinese players in the Algerian market intensifies competition in a region where Russia has traditionally maintained strong positions. On the other hand, the deal could serve as a starting point for Russian-Chinese technological cooperation — especially in engineering services, geological exploration, and integrated project support.
The Algerian side, in turn, emphasizes the importance not only of attracting capital but also of creating domestic value chains, including workforce training, equipment localization, and the development of technological partnerships. This opens opportunities for participation by a wide range of companies, including from Russia.
The Russian-Algerian Business Council views this deal as a positive signal of Algeria’s investment appeal and as confirmation of the country’s shift toward open and diversified economic engagement. Given the strategic nature of Russian-Algerian relations, it is advisable for Russian companies to strengthen their position in Algeria’s new energy initiatives — both individually and through trilateral partnerships.
