Sonatrach, the state-owned Algerian company, announced on Monday that it signed a nearly $5.4 billion contract with Saudi energy company Madad for oil and gas exploration in the Illizi Basin area in Algeria.

The production sharing contract extends for 30 years with an option to extend for an additional ten years and includes a seven-year exploration and drilling period.

Madad North Africa Energy Company is expected to fully finance this investment, including $288 million allocated for exploration and drilling. The southern Illizi Basin is located about 100 kilometers south of the town of In Amenas near the Algerian-Libyan border.

The deal was first announced on Algeria’s Ennahar TV channel.

Later on Monday, the Saudi Press Agency stated that total production is expected to reach about 993 million barrels of oil equivalent by the end of the contract period, including 125 billion cubic meters of natural gas.

Sonatrach is Algeria’s largest oil and gas producer and has been seeking new foreign partnerships to increase production and modernize infrastructure.

The company previously signed deals with international partners, including a recent $850 million contract with China’s Sinopec to explore and develop hydrocarbon resources.

Earlier this month, the Algerian Energy Minister said the country plans to invest $60 billion in the energy sector over the next five years, focusing on exploration, drilling, and production activities.

Algeria, a member of the Organization of the Petroleum Exporting Countries (OPEC), aims to strengthen its position among major global energy suppliers while meeting domestic demand and transitioning to more sustainable energy sources.