Exxon and Chevron are in talks with Algerian officials over potential deals to develop shale gas reserves in the country, according to industry sources.

Sources said that the topic was discussed during recent meetings in Algeria that were attended by delegations from both companies.

If deals are announced, they are likely to have investment values exceeding a billion dollars, sources said.

They are also expected to be awarded through direct negotiations rather than a public tender.

Sources stated that this was because only a few large oil companies possess the necessary technical expertise and financial capacity to execute the planned development projects.

With estimated reserves of 20 trillion cubic metres, Algeria has the world’s third-largest shale gas deposits, behind those of China and Argentina.

Protest concerns

As talks have progressed between the US oil companies, Algeria’s national oil and gas company and government officials, both sides have been seeking assurances, according to sources.

One source said: “Exxon and Chevron are both concerned about potential disruption from groups of people protesting over environmental issues.

“They want assurances that any future projects to develop shale gas reserves will not be disrupted by social unrest.”

At the same time, Sonatrach and Algerian government officials have sought assurances from the US oil companies that they will limit the environmental impact from shale development projects.

In 2015, there were large protests against shale gas development in Algeria’s southern province of Ain Salah when experimental drilling pilots were carried out in the area.

Protesters formed a human wall around the Dar Lahmar drilling site, with some chaining themselves to structures and requiring removal.

During the same wave of protests, demonstrators also successfully blocked the entrance to the In Salah Gas site.

They intercepted delivery trucks to stop chemicals from being delivered to the drilling site and set up tents on the outskirts of the site.

At the time, protesters expressed concern about the potential contamination of aquifers used to supply Algerians with drinking water.

More than 500 chemicals are used in the extraction of shale gas through directional drilling and hydraulic fracturing.

Deal talks

Chevron previously signed a heads of agreement relating to the development of Algerian hydrocarbon resources in 2024.

Last month, Algeria’s Minister of Energy Mohamed Arkab said that he is expecting Sonatrach to sign an agreement with Chevron for the development of “a large hydrocarbon deposit” before the end of the year.

He also stated that the country anticipates signing contracts with ExxonMobil by the end of the year for the development of “very important fields” that will contribute to Algeria’s natural gas production.

Exxon is yet to publicly comment on the status of its gas talks with Sonatrach.