Gide has assisted the Chinese group SINOPEC Overseas Oil & Gas Limited (SOOGL) in signing an oil sharing and production contract with the Algerian oil group SONATRACH for the Zarzaïtine oilfield located in the Illizi basin, south-east Algeria.
The contract, worth a total investment of USD 490 million over a 25-year period, was signed by SONATRACH's Vice President of Exploration and Production, Mohamed Slimani, and SOOGL's General Manager, Wu Xiuli, during an official ceremony on 28 May.
Under the terms of the contract, SINOPEC and SONATRACH are committed to carrying out a programme of development and exploitation works in accordance with the agreed development plan, the objective of which is the recovery and upgrading of hydrocarbons in the Zarzaïtine field. These works include the refurbishment of the gas lift unit, the drilling of twelve new development wells, as well as works on six existing wells, the tie-in of the new development wells and the maintenance of the existing surface facilities.
The implementation of this development plan will also allow for the recovery of approximately 95 million barrels.
The signing of this contract is the culmination of negotiations under the Memorandum of Understanding signed between the two companies on 20 May 2021 and reflects the willingness of both parties to continue their historic partnership and strengthen their cooperation in the field of hydrocarbon production. This contract is subject to the new law no. 19-13 on Hydrocarbons in the Zarzaïtine field, replacing the production sharing contract entered into in October 2021, concerning the increase in the recovery rate of crude oil reserves under old law no. 86-14. This is one of the first hydrocarbon contracts subject to the new hydrocarbon law, which is now in effect.
Gide's team comprised partner Samy Laghouati and of counsel Djamila Annad, both working out of Algiers.