Chevron & Exxon Near Landmark Deal to Unlock Algeria's Gas Reserves

Chevron Corporation CVX and Exxon Mobil Corporation XOM are on the brink of a landmark agreement with Algeria to develop the country’s immense natural gas reserves, including shale gas, as reported by Bloomberg. For the energy giants from America, this represents not only entry into one of the world’s largest untapped unconventional gas basins but also a chance to consolidate their presence in a region critical to global energy flows. The deal signals a long-term commitment to harnessing Algeria’s potential while strengthening their portfolios in unconventional resources.

Algeria possesses an estimated 3,419 trillion cubic feet of shale gas, of which 707 trillion cubic feet are technically recoverable, making it the world’s third-largest reserve after China and Argentina, and nearly four times greater than the proven conventional resources. This vast potential provides Algeria with a powerful tool to diversify production, boost exports and address the rising energy needs of key markets, especially in Europe. Reportedly, the negotiations are well advanced and expected to culminate in formal agreements in the coming weeks.

Building on Early Partnerships

Both companies have already laid the groundwork for this breakthrough. Chevron signed a memorandum of understanding with Sonatrach in June 2024 to develop hydrocarbon resources in Algeria's Ahnet and Berkine basins. Again, in January 2025, Chevron formalized cooperation with Algeria’s ALNAFT for offshore exploration, with plans to expand into onshore unconventional projects. Moving from study agreements to develop contracts would pave the way for pilot projects, multi-billion-dollar investments and new avenues for technological collaboration.

Expanding Influence in Global Energy Markets

From Exxon and Chevron’s standpoint, Algeria offers a unique combination of vast geological reserves, a strategic location near Europe and existing export infrastructure. With Europe urgently seeking alternatives to Russian gas, both companies see an opportunity to strengthen their role as reliable suppliers in a market hungry for diversification. By helping Algeria raise its production target from 137-200 billion cubic meters, Exxon and Chevron position themselves at the center of Europe’s evolving energy security strategy.

Navigating Challenges With Global Expertise

Developing shale gas in Algeria is not without risks. Hydraulic fracturing demands significant water resources and raises environmental concerns-like-pollution of groundwater, seismic risks and management of chemical effluents. In 2015, these environmental issues fueled public protests, particularly in the In Salah pilot project. Chevron, currently carrying a Zacks Rank #3 (Hold), and Exxon bring decades of global experience in addressing such challenges. With proven expertise in managing unconventional projects in North America and beyond, they are well-placed to introduce advanced technologies, best practices and safety protocols that can help mitigate environmental impacts and reassure local communities.

Defining Moment for Growth

For Chevron and Exxon, success in Algeria would mark entry into one of the last frontier shale markets outside North America. It would also demonstrate their ability to partner with host nations to unlock value, diversify supply chains and contribute to global energy stability. Beyond immediate returns, these agreements could establish a long-term presence in Algeria’s energy sector, with potential expansion into both onshore and offshore resources.

As negotiations near conclusion, Chevron and Exxon stand at the threshold of a defining opportunity, one that blends commercial growth with strategic influence and positions both companies at the heart of reshaping Europe’s energy future.

Key Picks

Investors interested in the energy sector might look at some better-ranked stocks like Vitesse Energy, Inc. VTS and Enbridge Inc. ENB. VTS and ENB currently sport a Zacks Rank #1 (Strong Buy) each. You can see the complete list of today’s Zacks #1 Rank stocks here.

New York-based Vitesse Energy is an independent energy company, engaged in the acquisition, development and production of non-operated oil and natural gas properties. The Zacks Consensus Estimate for VTS’ 2025 revenues indicates 15.3% year-over-year growth.

Calgary, Alberta-based Enbridge is a leading energy infrastructure company. One of its businesses is the transportation of energy through the most extensive and advanced crude and liquids pipeline system. The Zacks Consensus Estimate for ENB’s 2025 earnings indicates 9.50% year-over-year growth.

Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report

This article originally published on Zacks Investment Research (zacks.com).

Zacks Investment Research