Hydrocarbon sector: Algeria's challenge to leverage its vast reserves

Algeria holds the second-largest oil and gas reserves in Africa, with 27 billion barrels of oil equivalent in recoverable resources, accounting for one-sixth of the continent's total. While Africa's overall resource estimates have dropped by 11%, Algeria maintains a competitive edge through existing infrastructure, such as pipelines to Spain and Italy and LNG terminals in Skikda and Arzew. Sonatrach, which accounts for over 75% of liquid production and 80% of gas output, saw an increase in pipeline exports during the first seven months of 2026. However, the sector faces challenges, including an 8% drop in LNG exports in Q1 2026 and rising domestic energy demand. To maintain its market share against emerging producers like Namibia and Mozambique, Algeria has launched its largest drilling program to date, set to run through 2030.