Algeria’s state-owned energy company Sonatrach and China’s Sinopec signed a memorandum of understanding on Sunday to establish a framework for future cooperation in the oil and gas sector, the Algerian Ministry of Energy announced in a statement.

The agreement outlines plans to negotiate one or more contracts focused on the evaluation and development of hydrocarbon resources in the Gourara and Berkine East basins—two key sedimentary regions with high energy potential.

The ministry described the deal as a strategic step to strengthen collaboration with one of the world’s largest energy firms, aiming to optimize Algeria’s hydrocarbon output through joint efforts in exploration and production.

Sinopec has been active in Algeria since 2002 and currently partners with Sonatrach in the operation of the Zarzaitine oil field under a recovery and development agreement.