Algeria has launched a new oil and gas licensing round aimed at boosting production and attracting foreign investment, as the North African country grapples with declining hydrocarbon exports and persistent investor hesitation.
The “Algeria Bid Round 2026,” unveiled this week, offers seven onshore exploration blocks across the regions of Ouargla, Illizi, Touggourt and El Bayadh. Authorities say the areas could contain hundreds of millions of barrels of oil and significant natural gas reserves, forming a key part of efforts to stabilise long-term output.
The move comes at a time of mounting pressure on Algeria’s energy sector, which remains the backbone of the economy, accounting for more than 90% of exports and around 40 percent of state revenues.
Despite relatively favourable global energy prices in recent years, Algeria’s hydrocarbon export earnings fell to about US$45.2 billion in 2024 from US$50.5 billion in 2023, according to central bank data, reflecting declining production volumes rather than price weakness.
Natural gas exports dropped to roughly 101 billion cubic metres in 2024 from around 107 bcm a year earlier, as rising domestic consumption and supply constraints continued to weigh on external shipments.
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Crude oil and condensate exports also declined by about 5 percent year-on-year, in line with a longer-term downward trend in upstream output linked to ageing fields and limited new discoveries, according to OPEC data.
The government is hoping the new licensing round will help reverse this trajectory by encouraging international oil companies to invest in exploration and development. The technical phase of the bidding process is set to begin in June, with access to geological and seismic data, followed by clarification sessions later in the year. Final bids are expected in November, with contract awards scheduled for early next year under production-sharing or participation agreements with state energy company Sonatrach.
However, analysts remain cautious about the outlook for investor participation.
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Previous licensing rounds in Algeria have drawn limited interest from major international oil firms, despite reforms introduced in a 2019 hydrocarbons law intended to make fiscal terms more flexible and attractive.
Industry observers say lingering concerns over regulatory complexity, bureaucratic delays, limited operational autonomy for foreign companies and rigid fiscal frameworks continue to weigh on sentiment.
The U.S. Energy Information Administration has previously noted that Algeria’s crude output has been in long-term decline, partly due to insufficient exploration investment despite significant untapped potential in its vast onshore basins.
Energy analysts warn that without sustained foreign participation and increased upstream spending, reserve depletion could accelerate, further undermining export capacity and fiscal stability.
The International Monetary Fund has also highlighted risks to Algeria’s medium-term external position, noting its heavy reliance on hydrocarbons and vulnerability to sustained production declines.
For now, the government is betting that new acreage offerings and improved geological data access will help revive interest from international investors.
But with global energy companies increasingly selective about frontier investments and competing opportunities elsewhere, the success of Algeria’s latest licensing round remains uncertain.
