Chevron and Exxon Mobil Near Deal to Explore Gas in Algeria

Exxon Mobil and Chevron are nearing a deal to explore gas in Algeria. The deal would involve Exxon Mobil acquiring a 49% stake in Algeria's state-owned energy company, Sonatrach, for $4 billion. Chevron would hold the remaining 51% stake. The deal would allow the companies to explore and develop Algeria's gas reserves.

Algeria is nearing a significant deal with Exxon Mobil Corp. and Chevron Corp. to explore and develop the country's vast gas reserves, including shale gas. According to a senior official, the technical aspects of the agreement have been largely agreed upon, with commercial negotiations expected to be finalized soon. This deal would involve Exxon Mobil acquiring a 49% stake in Algeria's state-owned energy company, Sonatrach, for $4 billion, while Chevron would hold the remaining 51% stake [1].

The agreement comes as Algeria aims to diversify its economy, which currently relies heavily on hydrocarbons. The country seeks to replicate the success of the United States in shale gas development, which transformed the US into one of the world's largest gas exporters. Algeria's strategic location and existing pipeline infrastructure present significant attractions to foreign companies, although cost concerns remain a challenge [1].

The OPEC member holds the world's third-largest recoverable shale resources, behind China and Argentina, and ahead of the US. Algeria's existing gas infrastructure and three pipeline connections to Europe further enhance its attractiveness as a gas supplier. The country has been actively courting international partners to unlock its shale gas potential, having signed preliminary agreements with Exxon and Chevron in 2022 [1].

The deal is part of Algeria's broader strategy to attract foreign investment and modernize its energy sector. The country has faced challenges in the past, including mismanagement and lack of investment, which led to the approval of new legislation in 2019. The Russian invasion of Ukraine has also created new opportunities, as Europe seeks alternative gas supplies [1].

However, translating potential into actual production remains a significant challenge. Shale oil and gas output has not been widely successful outside the US due to factors such as water availability, reservoir quality, and legal and fiscal terms. Previous efforts in Algeria were shelved in 2016 due to concerns over water contamination [1].

Algeria's regulator, Alnaft, is currently conducting studies under the supervision of several oil companies to confirm the potential of shale gas resources. The next bidding round for oil and gas blocks is scheduled for the end of the first quarter of 2026 [1].

The proposed deal between Exxon Mobil, Chevron, and Sonatrach is expected to boost Algeria's efforts to diversify its economy and secure its energy future. The success of this venture will depend on the ability to overcome technical, economic, and environmental challenges.

References:

[1] https://www.bloomberg.com/news/articles/2025-08-15/algeria-nears-deals-with-exxon-and-chevron-in-shale-gas-push