Egypt and Algeria sign crude oil MoU, $1.1bn field development contract

Ahram Online , Wednesday 6 May 2026

Egypt and Algeria have signed a memorandum of understanding to establish a framework for Egyptian purchases of Algerian crude oil, in a move aimed at strengthening energy security and enhancing supply flexibility, as part of broader efforts to deepen bilateral cooperation in the petroleum sector.

The agreement was witnessed on Monday in Algeria by Minister of Petroleum and Mineral Resources Karim Badawi and Algerian Minister of State and Minister of Hydrocarbons Mohamed Arkab, and signed between the Egyptian General Petroleum Corporation and the Algerian national energy company Sonatrach.

The MoU seeks to secure Egypt’s domestic market needs, reinforce the sustainability of supply chains, and support Cairo’s ambitions to position itself as a regional hub for petroleum trading.

The agreement was signed by Salah Abdel Karim, CEO of the Egyptian General Petroleum Corporation, and Nour Eddine Daoudi, CEO of Sonatrach, in the presence of Egypt’s Ambassador to Algeria Abdel Latif El-Layeh and senior officials from both sides.

In parallel, and at the beginning of his official visit, Minister Karim Badawi also witnessed the signing of the general contracting agreement for the second phase development of the Hassi Bir Rekaiz oil field project in southern Algeria.

The project agreement was signed in the presence of Egyptian and Algerian officials, along with representatives from Petrojet, Italian company Arkad, and the joint venture partners Sonatrach and Thailand’s PTTEP.

The development works will be carried out by a consortium led by the Egyptian company Petrojet under an EPCCS model, covering engineering, procurement, construction, commissioning, start-up, and operation for the second phase of the field.

The project includes the construction of a central processing facility with a capacity of 32,000 barrels per day, along with shared infrastructure such as gathering stations, pipelines extending around 217 km, roads, and supporting facilities. The contract is valued at approximately $1.1 billion and was awarded following a competitive international tender.

Minister Badawi highlighted Petrojet’s role as a key executive arm of Egypt’s petroleum sector, praising its expanding regional footprint and the growing confidence in Egyptian companies’ ability to execute large-scale energy projects across international markets.