Algeria Expands Investment Partnerships with China and the U.S., Amidst Tensions with France
Energy, Industrial, and Agricultural Deals Highlight Algeria’s Strategic Economic Diversification Efforts.
Watan-The past week in Algeria saw the signing of several agreements with Chinese and American companies with major investment goals, reflecting an economic direction that the authorities claim is aimed at creating added value within the country. At the same time, strained relations with France are affecting the economic ties between the two countries, as seen in the cancellation of an important visit by a delegation of Algerian businessmen scheduled to Paris.
Energy represents the key sector that attracts American investment in Algeria. This reality was confirmed by the signing of memorandums of understanding between Sonatrach and Occidental Petroleum Corporation, based in the United States, on the sidelines of the Algeria-US Energy Forum 2025, aimed at strengthening and expanding their cooperation in the exploration and production of hydrocarbons in Algeria.
This agreement, signed Tuesday in Houston according to Sonatrach’s statement, aims to “expand and strengthen cooperation between Sonatrach and its partner Occidental Petroleum Corporation, by exploring new partnership opportunities in hydrocarbon exploration and production in Algeria.”
Algeria Boosts U.S. Energy Ties with New Oil and Gas Agreements
The first memorandum of understanding, according to the same source, “addresses the framework for discussions regarding the study of cooperation possibilities in developing carbonate reservoirs,” while the second memorandum outlines the “application of enhanced oil recovery techniques to maximize production and improve final recovery factors.” To remind, Sonatrach and Occidental are working with other partners to exploit the Berkin contractual area under a hydrocarbon agreement signed on July 19, 2022.
According to the CEO of Sonatrach, Rashid Hachichi, during his speech at the Algeria-US Energy Forum 2025 in Houston, the Algerian hydrocarbons law offers significant advantages and incentives to investors. He emphasized the desire to explore new investment opportunities, especially in areas related to hydrocarbons, renewable energy, hydrogen, and energy efficiency, as well as reducing the carbon footprint. This was in the presence of top officials from major American energy companies such as Exxon Mobil, Chevron, Occidental, and AR Products.
Previously, in January 2025, Algeria announced the signing of an agreement with Chevron to conduct a study on the potential hydrocarbon resources in Algeria’s offshore areas. The agreement, which lasts for 24 months, aims to conduct an in-depth study to assess the potential of oil resources in Algeria’s maritime regions, representing a strategic step to strengthen cooperation between Algeria and Chevron in technical and geological studies, paving the way for future exploration and development projects to value national hydrocarbon resources.
Algeria Strengthens Industrial Ties with China as Relations with France Cool
On the other hand, eight agreements were signed in Algiers between Algerian and Chinese companies to carry out industrial investment projects in sectors such as automobiles, mechanical industries, electronics, and agricultural projects as part of the Algeria-China Economic Forum on Investment.
In his speech, the Minister of Industry, Sefi Gharib, encouraged Chinese investors to take advantage of the improved investment climate in Algeria to increase their direct investments, while urging Algerian exporters to double their efforts to enhance the presence of national products in the Chinese market.
According to figures provided by the Director General of the Algerian Investment Promotion Agency, Omar Rakach, the agency has recorded a total of 42 Chinese projects worth $4.5 billion since its establishment in November 2022 until last March. These projects include 22 direct investments and 20 joint ventures between Chinese companies and Algerian partners, most of which are concentrated in the industrial sector.
The Chinese ambassador to Algeria stated that the agreements signed during the forum have a total value of more than $2 billion, highlighting that other investment projects are on the way, as “Algeria is an ideal destination for Chinese investors.”
In a separate context, Algeria-France economic relations have been noticeably declining due to recurring diplomatic crises between the two countries. In this context, the Algerian Economic Renewal Council announced the cancellation of a planned visit to France, as well as a scheduled meeting with the French employers’ organization MEDEF, according to a statement from the council.
Tensions Strain Algeria-France Trade as Investment Plans Falter
The statement confirmed that this decision came after the French authorities instructed the manager of a French shipping company to refrain from going to Algeria to implement an investment project. The cancellation of the French manager’s visit was driven by French authorities citing “the ongoing crisis between the two countries,” which starkly contradicts official statements calling for de-escalation and the normalization of Algeria-France relations.
Algeria has historically had strong trade relations with France, with trade exchange amounting to 11.8 billion euros in 2023. France is Algeria’s second-largest supplier and third-largest importer. However, due to the ongoing crises and Algeria’s push to diversify its partners, many French companies are complaining about constraints on their operations in Algeria, especially regarding access to major contracts. The wheat sector in France has been the hardest hit, with its exports to Algeria decreasing by about 80%, causing significant concern among French companies that had the majority of their business dealings in Algeria.
