Sonatrach Approves $60 Billion Five-Year Plan, Largest in Company History
Takeaway
At $60 billion, this is the largest capex cycle in Algeria's history. Oilfield service companies, drilling contractors, and EPC firms stand to benefit. The upcoming licensing round will be the key signal: strong international participation would validate the plan, while a weak response would raise execution concerns. Technip Energies, Samsung Engineering, ENI, and TotalEnergies are positioned as early movers.
Sonatrach's board has approved a 2026-2030 investment plan totaling $60 billion, the largest in the state energy company's history. Approximately 80% of the funding, or $48 billion, is allocated to upstream exploration and production. The remaining 20% targets downstream refining and petrochemicals.
$60B
Total investment
2026-2030
80%
Upstream share
exploration & production
$7B
Downstream program
refining + petrochemicals
Source: Sonatrach, AGBI
The plan responds to a dual pressure: rising domestic gas consumption and sustained export commitments to European buyers. Algeria's proven gas reserves stand at 159 trillion cubic feet (11th globally), but output from mature fields, particularly Hassi R'Mel, has been declining. Sonatrach currently exports approximately 52 billion cubic meters of gas per year and has set a target of 60 bcm by 2030.
A new licensing round with additional exploration blocks is expected in the first half of 2026. The blocks will target conventional plays as well as unconventional resources. Algeria holds an estimated 707 trillion cubic feet of technically recoverable shale gas, the third-largest reserves in the world after China and Argentina, but has no commercial shale production to date.
Sonatrach $60B Plan: Estimated Allocation by Sector ($B)
The downstream component centers on a $7 billion program. Key projects include a new 5 million metric ton per year refinery at Hassi Messaoud, expected to begin operations in 2027, and a naphtha cracking unit in Arzew with 1.2 million metric tons per year of gasoline production capacity. Algeria currently imports refined petroleum products despite being a major crude producer.
The scale of capital expenditure will require foreign participation. Algeria's domestic supply chain cannot fully provide the drilling rigs, seismic equipment, and engineering capacity needed. Technip Energies and Samsung Engineering are already positioned on downstream EPC contracts.
Sonatrach's previous five-year plans have faced delays from bureaucratic bottlenecks and partner disputes. The company's ability to launch the licensing round on schedule will be an early test of whether this cycle follows a different trajectory.
The plan also includes provisions for offshore exploration, a relatively untested frontier for Algeria. Sonatrach has previously conducted limited seismic surveys in the Mediterranean offshore zone but has not drilled any exploration wells there.