Mohamed Meziane, Sonatrach's CEO, said the company had given up the idea of participation as it had not met criteria set by PDVSA, including limiting Sonatrach's stake to 10 percent.
Chavez visited Algiers last month and met again with his counterpart Abdelaziz Bouteflika on the sidelines of a summit attended by American and African leaders in Venezuela.
Meziane also said Sonatrach was interested in taking part in developing Venezuela's Orinoco oilfields.
Sonatrach is looking for opportunities to boost its presence abroad despite the global economic crisis, Meziane said.
«It's during crisis period that good opportunities present themselve. It's at the moment that some international companies, which have their own financing capacities, seize business opportunities that help to strengthen their position on the market," he said.
He said Sonatrach was seeking new opportunities in Colombia and the Middle East including Iraq.
Sonatrach's current presence abroad include in countries such as Peru, Egypt, Libya, Niger, Tunisia, Mali and Mauritania.