Algeria’s state hydrocarbons firm SONATRACH has opened the door to foreign investors in its 2026 licensing round, offering 30 exploration blocks across the Berkine, Illizi, and Ahnet basins. According to a circular published by the Ministry of Energy and Mines in February 2026, the round includes 12 onshore conventional blocks, 10 unconventional (shale) blocks, and 8 offshore blocks in the Mediterranean. Bids are due by 30 September 2026, with awards expected in December.
The round is the first since Algeria amended its Hydrocarbons Law in 2022, reducing the state’s mandatory stake in new projects from 51 % to 40 % and introducing a sliding-scale profit split that can reach 80:20 in favour of the foreign partner for high-risk deep-water blocks. SONATRACH’s CEO Rachid Hachichi told state news agency APS that the fiscal terms are now “among the most competitive in North Africa,” citing a 20 % corporate tax rate and a 10-year exemption on royalties for unconventional fields.
Blocks and bidders
The 30 blocks cover 120 000 km², roughly the size of Greece. The offshore blocks—located in water depths up to 2 500 m—are the most closely watched. Italian major Eni has pre-qualified for three offshore blocks, while TotalEnergies and Shell have each submitted expressions of interest for two. Chinese firms Sinopec and CNOOC are also in the running, reflecting Beijing’s push to secure long-term gas supplies for its Belt and Road Initiative.
Onshore, the Ahnet basin is drawing attention because of its proximity to existing pipelines. The Hassi R’Mel gas hub, 300 km north, can handle an additional 15 bcm per year, and the Trans-Mediterranean pipeline to Italy is operating at only 60 % of capacity. Analysts at Wood Mackenzie estimate that the Ahnet blocks could yield 2-3 tcf of recoverable gas at full development, enough to supply Algeria’s domestic market for eight years.
Local content rules tighten
Foreign operators must now source 30 % of goods and services from Algerian suppliers, up from 20 % in the previous round. The Ministry of Industry has published a list of 450 approved local vendors, including pump manufacturers, drilling-mud producers, and logistics firms. Entrepreneurs in Oran and Hassi Messaoud have already reported a surge in orders; one drilling-equipment supplier in Hassi Messaoud told Reuters that his order book for 2026 is 40 % higher than in 2025.
SONATRACH has also introduced a “fast-track” approval process for joint ventures between foreign firms and Algerian SMEs. Projects that commit to at least 49 % Algerian ownership can receive environmental and customs clearances in 60 days instead of the usual 180.
Hydrogen and the German connection
Beyond oil and gas, the round includes three blocks earmarked for green and blue hydrogen pilot projects. Germany’s Federal Ministry for Economic Affairs and Climate Action (BMWK) has signed a memorandum of understanding with Algeria’s Ministry of Energy to co-finance feasibility studies on these blocks. Berlin is looking to import 50-70 TWh of green hydrogen by 2030, and Algeria’s solar irradiance—2 600 kWh/m²/year in the Sahara—positions it as a potential supplier.
A German-Algerian consortium led by Siemens Energy and Sonelgaz is already building a 10 MW electrolyser near Adrar; if the pilot succeeds, the consortium plans to scale to 1 GW by 2030. Entrepreneurs in renewable-energy start-ups in Algiers and Tamanrasset are watching closely, as the hydrogen blocks could create demand for locally assembled electrolyser components and solar-tracking systems.
Risks and red tape
Despite the improved fiscal terms, foreign investors still face hurdles. The 2022 law requires all disputes to be adjudicated in Algerian courts, and the EU’s second dispute-settlement procedure—initiated in July 2024 over import restrictions—has made some European firms cautious. A Brussels-based energy lawyer told Freshfields that “the lack of an international arbitration clause is a deal-breaker for mid-sized independents.”
Security is another concern. In January 2026, Algeria’s interior ministry reported three attempted sabotage attacks on pipelines in the Berkine basin. SONATRACH has responded by doubling its private-security budget to $120 million for 2026 and offering joint patrols with foreign operators.
What the round means for Algerian entrepreneurs
The 2026 round is not just about foreign capital; it is a supply-chain play. The 30 % local-content rule is expected to inject $1.2 billion into Algerian SMEs over the next five years, according to the Ministry of Industry. Entrepreneurs in Oran’s industrial zone are already pivoting: a former auto-parts supplier has retooled to produce wellhead valves, and a Hassi Messaoud-based logistics firm has won a contract to transport drilling rigs for Eni.
The hydrogen blocks offer a second opportunity. A 2025 study by the Algerian Renewable Energy Development Centre (CDER) found that assembling electrolyser stacks locally could reduce costs by 22 %. Start-ups in Algiers and Tamanrasset are now seeking partners to license European or Chinese electrolyser technology.
Key takeaway for entrepreneurs
Algeria’s 2026 oil and gas round is a $15 billion opportunity that will require 30 % local sourcing, creating immediate demand for drilling services, logistics, and equipment. The hydrogen blocks add a long-term play: entrepreneurs who secure technology licences or joint ventures now can position themselves as suppliers for the 1 GW pipeline planned by 2030.
💡 Starting a business in Algeria? GlobalStart guides you step by step: procedures, real costs, company forms (SARL, EURL, SPA) and CNRC registration.