Nadir Larbaoui inaugurates the new Algerian oil refinery in Haoud El-Hamra

The Algerian Prime Minister, Nadir Larbaoui, commemorating the 69th anniversary of the founding of the General Union of Algerian Workers (UGTA), inaugurated the construction of a new oil refinery in Haoud El-Hamra in the province of Ouargala, at a cost of 3.7 billion euros. 

This milestone will strengthen the Algerian energy sector, which could become an alternative to Russian oil for the European Union. The event coincides with the release of a 731 million euro investment by the Spanish company Repsol after the end of the trade crisis with Spain. 

The event, with the slogan ‘Committed to the development of energy, water and food resources’, was attended by the Minister of Energy, Mines and Renewable Energy, Mohamed Arkab, the Minister of Labour, Employment and Social Security, Faisal Bentaleb, and the Secretary General of the UGTA, Amar Takdjout. 

The oil and gas industry is the country's main economic driver, accounting for 18.9% of the Gross Domestic Product (GDP), according to official figures included in the 2025 budget, and fossil fuels represent 85% of the country's total exports. 

Currently, the North African country has five oil refineries supervised by the Algerian company Sonatrach, one of the most powerful in the sector worldwide. These refineries correspond to six fields (one oil and five gas) whose dimensions exceed 1,400 square kilometres. 

The development of the plant is part of the plan adopted last November by the Algerian company for the period 2025-2029, which is based on: increasing exploration and production; and developing the infrastructure for a greater export capacity. In addition, the facility will be the most modern of its kind in the country, which will mean a big step forward in the reduction of greenhouse gas emissions, as well as the volume of waste. 

The agreement establishes that the works will be completed in 2026. After the completion of the works, it is expected that the new plant will be among the top three in terms of annual oil processing capacity. The resolution stipulates that the plant will have a two-year warranty and a production capacity of 5 million tonnes per year. However, it is expected that diesel production will not begin until 2027. 

According to Rachi Hachichi, CEO of Sonatrach, the construction of the new complex reflects Algeria's commitment to economic diversification. Hachichi concluded that the location of the Haoud El-Hamra plant will be strategic, as it will be the closest to the Algerian capital.

Hachichi explained that locating the refinery close to the Hassi Messaoud oil fields will ease the pressure on the country's two main refineries: Skikda and Arzew. It will also facilitate rationalisation and improve efficiency in terms of supply, especially to the populations in the south of the country.

These measures could bring Europeans closer to hydrocarbons and further away from Russian supplies. For Hachichi, this new project responds to the new dynamics of the Algerian economy and the country's growing energy needs.