Algeria is edging closer to sealing two landmark agreements with U.S. energy giants ExxonMobil and Chevron as it seeks to unlock its vast shale gas reserves and reinforce its position as a major gas supplier to Europe.
With an estimated 3,419 trillion cubic feet of shale gas in place of which 707 trillion cubic feet is considered technically recoverable Algeria ranks third globally behind China and Argentina. This volume is nearly four times its proven conventional reserves, underscoring the strategic importance of unconventional resources to the country’s future energy mix.
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Long-term energy security
Talks with the U.S. majors are reportedly in their final stages, with signatures expected in the coming weeks. In May 2024, Sonatrach and ExxonMobil signed a memorandum of understanding to assess the Ahnet and Gourara basins in southern Algeria, while Chevron entered into a cooperation deal with the National Agency for the Development of Hydrocarbons (ALNAFT) earlier this year for offshore projects, seen as a prelude to broader shale and onshore ventures. According to ALNAFT chairman Samir Bekhti, the technical framework is largely settled, with commercial terms under final negotiation.
For Algiers, shale gas offers a crucial opportunity to offset natural declines in conventional output and meet its goal of raising annual production from 137 to 200 billion cubic meters. Most of Algeria’s gas already flows to Europe via the Medgaz and Transmed pipelines, and additional LNG projects are in motion. European markets, striving to reduce reliance on Russian supplies, are increasingly turning to North Africa for long-term energy security.
Yet, challenges loom. Shale development requires hydraulic fracturing, a water-intensive and environmentally controversial process that previously sparked protests in the south. Authorities must therefore balance investment opportunities with strict environmental safeguards and community engagement.
If finalized, the Exxon and Chevron deals would mark Algeria’s entry into the shale gas producers’ club, positioning the country as a stronger global player while providing Europe with a critical alternative source of energy.
