The Algeria-Azerbaijan oil and gas cooperation agreement has officially entered into force following the issuance of Presidential Decree No. Memorandum of Understanding sigThe Presidential Decree No. 26-195 dated May 12, 2026 is an instrument of ratification of a Memorandum of Understanding originally signed between Algeria and Azerbaijan on November 29, 2022, and not a new agreement concluded in 2026.”ned between the two countries. The move reflects Algeria’s strategy of expanding its network of energy partnerships and reinforcing its presence in international energy markets.
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The agreement carries significant strategic value as it goes beyond conventional hydrocarbon cooperation. It covers a broad range of activities, including onshore and offshore exploration and production, the development of oil and gas projects, petrochemical industries, transportation, marketing and distribution of energy products, as well as research, innovation, training, and human resource development.
Augusta Refinery at the Heart of the Partnership

One of the most significant provisions of the agreement is the establishment of a long-term supply of Azerbaijani crude oil to Sonatrach Raffineria Italiana, owner of the Augusta refinery in Sicily, Italy.
This provision represents a major step in Sonatrach’s strategy to strengthen its refining activities beyond Algeria’s borders. Azerbaijani crude supplies will provide greater flexibility in securing feedstock for the refinery, diversifying crude sources, enhancing operational stability, and improving competitiveness in European markets.
The arrangement is also expected to strengthen Algeria’s presence in the European and Mediterranean petroleum products market by leveraging Augusta’s strategic location and refining capacity.
A Partnership Beyond Traditional Hydrocarbons
The agreement is not limited to commercial energy transactions. It reflects a shared ambition to build a long-term partnership between two major energy-producing nations. Algeria remains one of Africa’s leading energy exporters and a key supplier to Europe, while Azerbaijan possesses extensive expertise in developing the Caspian Sea’s hydrocarbon resources through its national energy company, SOCAR, a prominent player in regional and international energy markets.

The partnership opens new opportunities for technology transfer, knowledge exchange, and joint project development, enabling both countries to better navigate the rapidly evolving global energy landscape.
Expanding Algeria’s Energy Influence
The implementation of the agreement highlights Algeria’s broader vision of evolving from a traditional exporter of raw hydrocarbons into an integrated energy player active across the entire value chain—from production and refining to marketing and distribution.
In this context, the Augusta refinery serves as a key strategic asset supporting Sonatrach’s expansion within Europe. Cooperation with Azerbaijan adds a new dimension to this strategy by diversifying partnerships, securing supply sources, and strengthening the energy resilience of Algeria’s international operations.
More than a bilateral agreement, this partnership represents a concrete step toward building an international energy network that reinforces Algeria’s position as a major actor in regional and global energy markets.


