Norways Statoil and UK/Dutch Shell have been awarded an exploration licence for Algerias Timissit block, an area with shale gas potential, located near the countrys border with Libya and Tunisia.
The block covers an area of 2,730 square kilometres. Statoil bid in a partnership with Shell, where Statoil will be the operator with 30 per cent equity, Shell will hold 19 per cent equity and the remaining 51 per cent will be held by Algerias national oil company Sonatrach.
Statoil has called the award an opportunity to test a potentially large shale resource play.
The first exploration phase is expected to last up to 2017 and include the drilling of two wells and seismic acquisition, said Nick Maden, senior vice-president for Statoils exploration activities in the Western Hemisphere.
The award is part of the Algerian Ministry of Energy & Mines National Agency for Hydrocarbon Resources Valorisations (ALNAFT) fourth international bid round, which was launched in January.
According to the US governments Energy Information Administration (EIA), Algeria has recoverable shale gas reserves of 20 trillion cubic metres, behind only China and Argentina in the global pecking order.
The country is currently struggling to boost its output as some of its largest producing gas assets mature and production declines.
Statoil already has stakes in other gas assets in Algeria, including the In Amenas gas plant, which is located south of the new acreage.
Earlier this month, Statoil and the UKs BP announced they were resuming ordinary staff rotation at the facility 19 months after it was hit by a terrorist attack, which saw more than 800 people taken hostage and more than 60 killed.