Algiers, 20 June 2025 — In one of Algeria’s most significant recent tenders, the Chinese independent company Zhongman Petroleum and Natural Gas Group (ZPEC) has won the bid to develop the Zerafa II gas block, located in the southern part of the country. According to the results published by the national hydrocarbons regulator ALNAFT, the Chinese proposal was deemed the most advantageous overall.
Competing bidders included major European energy players such as TotalEnergies and the ENI–Equinor consortium, whose offers were surpassed in terms of combined conditions and expected implementation efficiency.
A Strategic Gas Block in Southern Algeria
Zerafa II is a large gas-bearing area covering more than 38,000 square kilometres in the Tindouf region, near the Mauritanian border. Although the contract with ZPEC has not yet been formally signed, the tender results have been confirmed, and the completion of legal procedures is expected in the coming weeks.
The choice of a Chinese contractor reflects Algeria’s strategic course toward diversifying its international energy partnerships. Since 2022, the country has been actively expanding its network of economic partners, giving priority to projects shielded from political constraints and sanctions-related risks.
Against this backdrop, ZPEC’s entry into the Algerian market signals a broader shift toward cooperation with Asian, Middle Eastern and BRICS countries.
Who Is ZPEC?
ZPEC is a Chinese drilling and engineering company listed on the Shanghai Stock Exchange. It has previously operated in Iraq, Kazakhstan and other Central Asian countries, and is now one of the fastest-growing independent contractors in the Asian oil and gas sector.
In Algeria, ZPEC will not act as a full-cycle operator but as a technological partner with access to resources and support from China’s national development institutions.
Algeria’s Changing Energy Landscape
Algeria holds the largest proven natural gas reserves in Africa — more than 4.5 trillion cubic metres — and ranks 13th globally.
A decline in export dependence on the European Union, coupled with a 31% drop in hydrocarbon revenues in 2024 and a budget deficit reaching 14.5% of GDP, has prompted the Algerian government to accelerate reforms in its external economic model.
Under these conditions, Algeria seeks partners capable of ensuring long-term project stability without geopolitical preconditions.
A Broader Signal to Global Markets
The ZPEC deal also carries wider implications. It reflects Algeria’s intention to build a multilateral energy architecture involving countries of the Global South and demonstrates its readiness to grant access to strategic resources to independent companies that can offer flexibility, investment and technological localization.
Implications for Russia
For Russia, the development is both a challenge and an opportunity.
On one hand, the expanding presence of Chinese companies in Algeria increases competition in a market where Russia traditionally maintains strong positions.
On the other hand, the project could become a platform for Russia–China technological cooperation, particularly in engineering services, geological exploration and integrated project support.
Algeria’s emphasis on value-added development — including workforce training, equipment localization and technological partnerships — opens the door to participation for a broad range of companies, including Russian ones.
RABC Commentary
The Russia–Algeria Business Council (RABC) views this deal as a positive signal of Algeria’s growing investment appeal and as further confirmation of its shift toward an open and multi-vector economic engagement.
Given the strategic nature of Russian–Algerian relations, Russian companies are advised to strengthen their position in Algeria’s new energy initiatives — both individually and within trilateral partnership frameworks.
By Artem Koraev
