Algeria opens up its natural gas reserves to the United States
The Algerian government is negotiating with two US companies for the concession to exploit the country's large natural gas reserves
- Unprecedented agreement
- Message to the United States
- Third largest reserves in the world
- Main gas supplier to Spain
Algeria has taken a significant step in its strategy to move closer to Washington, amid fears that its traditional alliance with Russia could compromise its foreign policy under the Trump administration.
Unprecedented agreement
This step consists of negotiations with two US energy companies, ExxonMobil and Chevron, on an unprecedented agreement that would allow them to exploit Algeria's natural gas reserves, something unheard of in the history of the Algerian energy sector.
The agreement will include the exploitation of reserves of so-called shale gas, which is natural gas trapped in low-permeability rock formations, especially in shale rock. Extracting this type of gas requires special techniques such as hydraulic fracturing, known as “fracking”, to access the pores and fractures in the rock at great depths. These techniques are available to large companies such as those in the United States.
According to Samir Bakhti, head of Algeria's Petroleum Energy Regulatory Authority, negotiations are in their final stages and the technical aspects of the agreement have already been finalised. Only the commercial details are still being negotiated.
Message to the United States
Bakhti pointed out that the agreement with ExxonMobil and Chevron sends an important message at a time when the country is betting on shale gas exploitation to increase state revenues. It should be borne in mind that Algeria is heavily dependent on the oil and gas sector, which accounts for more than three-quarters of its annual production.
The message referred to by the head of the Algerian Petroleum Authority has to do with the current geopolitical context: Algeria is making an effort to move closer to the United States since Donald Trump's arrival in the White House, fearing that its alliance with Russia could lead to sanctions from Washington.
It was Marco Rubio, the current Secretary of State, who, when he was a senator, called for sanctions to be imposed on Algeria because of its military agreements with Russia.
Shortly after Trump's victory in the last presidential election, the Algerian ambassador to Washington, Sabri Bouadoum, expressed his country's willingness to open its doors to investment by US companies.
Third largest reserves in the world
The agreement with ExxonMobil and Chevron could be the start of an influx of US investors into Algeria, as the shale gas sector is very attractive to the United States: Algeria has the third largest proven reserves of this type of gas in the world, behind China and Argentina, and ahead of the United States.
In addition, Europe's need to find alternative energy sources to gas from Russia is a strategic advantage that the Algerian government wants to exploit, following the example of the United States, which, thanks to the exploitation of shale gas through fracking, has gone from being a net energy importer to one of the world's largest exporters in just 15 years.
In fact, Algeria already has some infrastructure that would allow it to move forward in this process: the first pilot shale gas extraction well was opened in 2014 in the Ahent and Barkin basins, areas rich in this fuel.
The country has taken advantage of European countries' need to find alternative supplies to Russian gas since the invasion of Ukraine and has positioned itself in the international gas market, with various agreements with Italian, British and American companies through its state-owned company Sonatrach.
Main gas supplier to Spain
In the case of Spain, Algeria is the main supplier of natural gas, accounting for 38.5% of total imports throughout 2024, ahead of Russia. Algeria supplied our country with a total of 131,202 GWh in 2024, 105,891 GWh through the Medgaz gas pipeline and 25,311 GWh as liquefied natural gas. This figure represents an increase of 12.8% compared to natural gas imported from Algeria during 2023.
In recent years, Algeria only lost its position as Spain's main gas supplier in 2022, when, due to the energy crisis, its figures were surpassed by those of the United States.