Algeria has approved a five-year hydrocarbon sector development plan for 2026–2030, prioritizing the recovery of production, expansion of the resource base, and accelerated development of refining and processing capacities. The decision reflects the authorities’ intent to reverse the decline in investment observed in recent years, which has contributed to shrinking reserves and lower output levels.
The plan was endorsed on 25 December 2025 at Sonatrach’s General Shareholders’ Meeting held in Algiers and chaired by Algeria’s Minister of Energy and Mines, Mohammed Arkab. The relevant information was published in official statements by the company and the sector ministry.
From Production Stabilization to Structural Transformation
According to official wording, the approved plan is built around two core priorities. The first is strengthening the sector’s upstream fundamentals—primarily exploration and production—to ensure reliable supply for the domestic market and fulfil export commitments. The second is the accelerated development of downstream activities, including refining and petrochemicals.
The authorities emphasize that the plan is not merely a technical roadmap for the industry, but part of a broader economic agenda: reducing import dependence, increasing domestic value added, and enhancing the competitiveness of Algerian products in external markets.
Up to $60 Billion in Investments, with Upstream as the Main Priority
Earlier, in October 2025, Minister Arkab stated that Algeria planned to invest around $60 billion in the hydrocarbon sector over the next five years. According to him, roughly 80% of this funding is expected to be directed to upstream activities—exploration, production, and reserve replacement—including improving recovery rates at mature fields.
The remaining investments will be allocated to refinery modernization, expansion of petrochemical capacities, and the development of storage and export infrastructure. This approach indicates Algeria’s intention to secure a sufficient resource base for processing before launching large-scale downstream expansion.
Regulatory Reforms and the Return of Foreign Investors
The Algerian authorities link the implementation of the five-year plan to reforms of the hydrocarbon legal framework aimed at improving the sector’s investment attractiveness. Updated regulations are designed to offer more flexible terms for foreign companies, including risk-sharing arrangements and enhanced conditions for exploration projects, including offshore areas.
In July 2025, Algeria finalized five oil projects awarded to foreign companies under the 2024 licensing round. The move formed part of a broader strategy to revive upstream development following a period of subdued investment.
Resource Potential and the Time Factor
Algeria remains one of the leading energy players in Africa and the Mediterranean. Official estimates suggest the country holds around 160 trillion cubic feet of natural gas and approximately 13 billion barrels of recoverable oil reserves. At the same time, industry assessments indicate that if current production levels persist and no major new discoveries are made, oil reserves could be depleted within roughly 30 years.
This factor largely explains the new plan’s emphasis on intensifying exploration activity and deploying more capital-intensive and advanced extraction technologies.
Implications for Russian–Algerian Economic Cooperation
The approved five-year plan creates a more predictable investment framework for Algeria’s international partners. For Russian companies, it opens opportunities to participate in exploration and production projects, supply equipment and related services, and develop joint initiatives in refining and petrochemicals.
In a broader context, Algeria’s strategy confirms its intention to maintain its role as a key hydrocarbon exporter while gradually transforming the sector toward deeper processing and a more sustainable long-term development model.
Source: MEDIA RABC
