Albania offers Albpetrol, oil blocks to foreign investors
Energy Minister Damian Gjiknuri speaks at the Albania Oil, Gas and Energy 2015 Summit.
Minister Rama reconfirmed government's plans to complete the privatization of Albpetrol oil company after a failed tender in 2012, and make the free oil and gas blocks under Albpetrol's management available to foreign investors for exploration
TIRANA, March 17 - The Albanian government has invited international investors to participate in the privatization of Albpetrol oil company and get involved in onshore and offshore oil and gas exploration.
Speaking at an international energy summit in Tirana this week, Prime Minister Edi Rama described energy as one of the most important sources of Albania's growth at a time when the country is set to become a regional gas hub from the construction of the Trans Adriatic Pipeline bringing Caspian gas to Europe through Albania, Greece and Italy.
Addressing investors in the two-day summit, many of whom shareholders in TAP, Prime Minister Rama reconfirmed government's plans to complete the privatization of Albpetrol oil company after a failed tender in 2012, and make the free oil and gas blocks under Albpetrol's management available to foreign investors for exploration.
“This will the year of the completion of a prolonged privatization process in Albpetrol state company," said Rama, adding that international financial institutions were assisting with the company's financial assessment and privatization documentation.
In its 2015-2017 national economic reform programme approved last January, government says it plans to restructure Albpetrol oil company, the biggest remaining state run company whose privatization in 2012 registered a spectacular failure after a fake Euro 850 million bid by an Albanian-led consortium.
Government says it has set up a working group with technical assistance from the IFC, the World Bank's private sector lending arm, to study Albpetrol’s restructuring and identify its proper form of sale or a public-private partnership in a bid to increase production, employment and investment in the oil sector.
The Prime Minister described Albpetrol as an atavistic and hybrid enterprise under state management during the past two decades of Albania's transition to a market economy.
Energy Minister Damian Gjiknuri announced government would soon initiate tender procedures for the exploration of the first three oil and gas blocks under concession contracts.
Albania currently has 13 free onshore and offshore oil and gas block which are scheduled for concession.
Foreign investors engaged in oil and gas exploration in Albania are exempted from the 20 percent VAT, can have their exploration stage extended from 5 to 7 years and engage in production from 25 to 30 years.
Studies show Albania’s oil and gas reserves are estimated at 400 million tonnes, of which around 10 percent are easily extractable.
Canada-based Bankers Petroleum which operates the Patos-Marinza heavy oilfield in south-western Albania and is the country’s largest foreign investor. Petromanas Energy, another Canada-based company and its Dutch partner Shell have recently made an important discovery from its Shpirag-2 well in Block 2-3, which covers an area of 3,450 square kilometres onshore south-central Albania.
