Eni lands drilling deal in Algeria

Prospective areas have great potential, Italian company says.
By Daniel J. Graeber Follow @dan_graeber Contact the Author   |   June 25, 2014 at 10:26 AM
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MILAN, Italy, June 25 (UPI) -- Italian energy company Eni said Wednesday it secured the rights to drill in three areas in Algeria from state energy company Sonatrach.

The three permits for the El Guefoul, Tinerkouk and Terfas reserve areas onshore Algeria are valid for two years and cover 18,000 square miles.

"The work program includes studies and drilling of prospection wells to define the potential of the areas," the Italian company said in a statement. "The three areas are considered of great interest and potential."

In January, the Italian company said there was no evidence to suggest it was involved in illegal conduct while working in the Algerian energy sector.

Eni was under investigation for "suspicious payments" of around $268 million related to contracts for its oil subsidiary Saipem in Algeria.

The Italian energy company in December signed an agreement with corruption watchdog Transparency International, which it said "confirms the importance given by Eni to business ethics."

Algeria has the tenth-largest natural gas deposits in the world and is the third-largest gas supplier to Europe. Its exports have been in decline, however, because of lagging foreign investments.

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