Algeria has signed an agreement worth more than $1 billion to expand production at the Hassi Bir Rekaiz oilfield, Business Insider Africa reports.

The contract is aimed at increasing oil production, expanding export potential and strengthening Algeria’s position in the global energy market.

The agreement was signed by Algeria’s state energy company Sonatrach. The EPC contract, covering engineering, procurement and construction, was awarded to a group of companies comprising Egypt’s Petrojet and Italy-based Arkad, with the participation of Thailand’s PTT Exploration and Production, which is already operating at the field together with Sonatrach.

The project provides for the implementation of the second phase of development at the Hassi Bir Rekaiz oilfield, located in the Berkine Basin in south-eastern Algeria, near the borders with Libya and Tunisia.

Under the agreement, a crude oil processing facility with a capacity of around 31,500 barrels per day is expected to be built, along with supporting infrastructure for the treatment of associated gas and produced water. The expected implementation period is 39 months.

Production at Hassi Bir Rekaiz began in 2022 following the first phase of development, which was launched in 2019. At the initial stage, production was brought to around 17,000 barrels per day.

Algeria aims to increase production at the field to around 30,000 barrels per day by 2029. In the longer term, the target could reach 60,000 barrels per day.

The project also includes the drilling of new wells and the construction of transportation infrastructure, which should help improve the recovery rate and operational efficiency of the field.

Alongside the EPC agreement, Sonatrach signed a memorandum of understanding with the Egyptian General Petroleum Corporation. The document concerns cooperation in the marketing of crude oil and petroleum products.

The signing ceremony was attended by Algeria’s Minister of Energy, Mohamed Arkab, and Egypt’s Minister of Petroleum, Karim Badawi. According to the Algerian side, the agreements reflect the development of economic cooperation between African and Arab countries.

The expansion of the Hassi Bir Rekaiz project comes as Algeria seeks to increase hydrocarbon production, attract foreign investment into the oil and gas sector and strengthen its role as one of the key energy suppliers to international markets.

Algeria is one of Africa’s largest gas exporters and supplies natural gas to Europe through pipelines linked to Spain and Italy. In recent years, the country has stepped up investment in upstream projects and pursued reforms aimed at attracting international investors.

In addition, the authorities are promoting the upcoming Algeria Bid Round 2026, which is expected to open new opportunities for foreign companies in the country’s oil and gas sector.

Source: Business Insider Africa