Algeria’s state-owned energy giant Sonatrach will launch a competitive bid round in 2026 for exploration and production rights across seven oil and gas fields, according to Discovery Alert. The announcement, published on 29 April 2026, marks the first major licensing opportunity since the government revised its hydrocarbon law in 2022 to attract foreign investment and accelerate production.
The seven fields are located in three sedimentary basins: the Berkine Basin in the east, the Illizi Basin in the southeast, and the Timimoun Basin in the southwest. While Sonatrach has not disclosed estimated reserves or production potential, industry analysts project the blocks could collectively yield between 50 000 and 100 000 barrels of oil equivalent per day once fully developed. The bid round follows a series of exploration successes in 2023–2025, including the discovery of two new gas fields in the Illizi Basin that added an estimated 1.2 trillion cubic feet of recoverable reserves.
Sonatrach’s 2026 bid round is structured under the revised Hydrocarbon Law No. 22-13, which introduced a sliding-scale royalty system and tax incentives for investors. Royalties now range from 5 % to 20 % depending on field size and production levels, down from the previous flat rate of 20 %. Corporate tax on hydrocarbon profits has been reduced from 38 % to 30 % for fields with reserves below 50 million barrels, and to 25 % for fields above that threshold. The law also allows foreign companies to hold up to 49 % equity in joint ventures with Sonatrach, a cap unchanged from the 2005 legislation but now accompanied by clearer dispute-resolution mechanisms.
For Algerian entrepreneurs, the bid round presents indirect opportunities in the supply chain. Sonatrach’s 2025 procurement budget allocated 350 billion dinars (approximately 2.5 billion USD) to local contractors, a 15 % increase from 2024. The national oil company has also pledged to award 30 % of service contracts to Algerian SMEs, up from 20 % in 2022. Sectors likely to benefit include drilling services, well intervention, logistics, and digital monitoring systems. In 2025, Sonatrach launched a 100-million-dinar fund to support start-ups developing AI-based predictive maintenance tools for oilfield equipment, a programme that remains open to applications until the end of 2026.
The timing of the bid round aligns with Algeria’s broader economic diversification strategy. The government’s 2025–2029 five-year plan allocates 40 % of public investment to non-hydrocarbon sectors, yet oil and gas revenues still account for 90 % of export earnings and 60 % of state budget revenues. In 2025, Algeria’s oil production averaged 950 000 barrels per day, below the 1.2 million target set in 2020, while gas production reached 100 billion cubic metres, down from 130 billion in 2019. The 2026 bid round aims to reverse this decline by attracting capital and technology to mature fields and unconventional resources.
For the Algerian diaspora, the bid round offers a structured pathway to participate in the energy sector. The revised hydrocarbon law explicitly encourages Algerian nationals abroad to form consortia with foreign firms or to invest in local service companies. In 2025, the Ministry of Energy and Mines launched an online portal where diaspora investors can register interest in joint ventures, with 187 applications received in the first six months. The portal also provides access to geological data packages for the seven fields, available for a fee of 500 000 dinars per block.
Sonatrach has scheduled a roadshow for June 2026 in London, Houston, and Dubai to present the bid round to international oil companies and institutional investors. The company will release the final tender documents in September 2026, with bids due in December 2026. Contract awards are expected in the first quarter of 2027, subject to approval by the Algerian parliament.
Key takeaway for entrepreneurs
Sonatrach’s 2026 bid round opens procurement opportunities for Algerian SMEs in oilfield services, logistics, and digital solutions, with a 30 % local content target. The revised hydrocarbon law reduces tax and royalty burdens for investors, while the diaspora can access geological data and form consortia through a dedicated online portal. Applications for the 100-million-dinar start-up fund remain open until the end of 2026.
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