Total and Eni ink deal with Sonatrach for offshore exploration

Total and Eni ink deal with Sonatrach for offshore exploration

Total and Eni ink deal with Sonatrach for offshore exploration

/ Oil & Gas / Wednesday, 31 October 2018 11:16

Algeria's state energy firm Sonatrach signed deals with France's Total and Italy's Eni for the first oil explorations off the North African country's Mediterranean coast.

Sonatrach had announced that it aimed to start exploratory drilling in the waters from early 2019 as Algeria looks to stem a decline in its overall oil output.

The deals inked cover the “exploration and evaluation of the oil potential of the eastern and western parts of the Algerian offshore basin”, Sonatrach said in a statement.

Eni said the agreements “include an exclusive partnership for offshore exploration in Algeria”.

“Together with Sonatrach and Total, we will have the opportunity to explore the deep waters of the Algerian offshore, a virtually unexplored geological province,” Eni CEO Claudio Descalzi said.

“In parallel, Eni and Total will also pursue obtaining exploration permits that will allow for the rapid completion of the hydrocarbon potential assessment,” the Italian firm said.

Revenues from Algeria's onshore oil production currently account for 65% of the country's budget and 90% of its foreign exchange income.

Sonatrach also said it had sold a 49% stake to Eni in three research areas in the Berkine basin, an onshore area in the east of the country.

The partners envision work costing more than $1 billion (900 million euros) and preliminary investments of $80 million for exploration, Sonatrach said.

An Italian court last month acquitted Eni and ex-CEO Paolo Scaroni of bribery in Algeria, but fined a subsidiary and jailed its former boss. Eni, Scaroni and subsidiary Saipem went on trial three years ago over payments of 197 million euros ($230 million) to Algerian officials between 2007 and 2010 to win energy contracts. The court ordered 197 million euros be seized from Saipem and jailed former boss Pietro Tali for four years and nine months.

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