In Albania, the foreign direct investment (FDI) has been steadily welcome
since the country shifted away from communism in the early 90s. Today a large percentage
of the FDI into the country comes on the back of the extensive development of
its rich petroleum resources. The country, from 2004, seen the seed of Bankers
Petroleum on its largest onshore oilfield in all of Europe. It makes the
country the largest exporter (1.06 mt) of crude oil in the Western Balkans. Bankers
Petroleum achieved a record level of average oil production of 20,690 barrels
of oil per day (bopd) in 2014, 14% higher than the 2013 average production.
However, in the upstream sector, there
are many other relevant expected developments. The companies Petromanas
Energy and Royal Dutch Shell is exploring throughout the blocks 2 and 3, a deep
areas of fractured carbonate structures of Eocene-Cretaceous age, similar to
those in southern Italy, for the identification of potential reserves of hydrocarbons.
The companies has invest until now around 160 million Euro.
In same time, big interest are rising the
development in licensing new oil blocks. In specific, Shell & Petromanas
and Navitas (part of Delek Group) have been awarded the exploration blocks 4
and Dumre respectively and it is expect the following soon with the sign of
petroleum agreements. Regard submits of bids for other three blocks, as by the
last updates by AKBN, the deadline is postponed at 30th November. A
process that has risen a high interest from more than 20 serious international
companies. To stimulate the process Albania have already started the revision
of the current legal framework and very soon will have a modern legal and
fiscal package for the business community. The all will be a further sustain
for the Albanian Government planning to privatize within 2016 the state-owned company
Albpetrol active in the development, production and trade of crude oil.
As regards the production, the volume of refined
petroleum products (286.2 kt) processed in 2014 constitutes an increase by over
350% compared to 2013. The same goes for the volume of exported petroleum products,
which increased by 570% to 134.5 kt. At the same time, the import of petroleum
products also increased by 15.4% to a level of around 1.16 mt in 2014. The
overall consumption of petroleum products in 2014 is estimated at 1.308 mt (an
increase of 19.6% compared to 2013).
Notwithstanding the here above positive development
the future reserve other opportunities. Normally the investing in emerging
market as Albania and WBs involves special risks such as economic and political
risk. Nevertheless, the last development of integration process that the region
has taken will soon bring to a fully alignment with the EU legal and institutional
framework. In regard the all emphasis the favourable position of the country in
region with high level of dependence and a limited number of external sources
of oil supply.
In this direction, the transposition of the
Oil Stocks Directive with its 1st January 2023 deadline will be the
key focus. Albania’s current emergency oil stockholding system is based on legislation
from 1999 (amended in 2004) and governmental decrees from 2004 and 2007, where
the entire emergency stockholding obligation is assigned to the oil industry. However,
the current system is not compliant with Directive 2009/119/EC. An initial
draft Law on Emergency Oil Stocks was prepared and Albania is committed to
taking a final decision in the very near future.
Then, the main priorities for the sector became
the strengthening of the technical and enforcement capacity for the
establishment of emergency oil stocks. In particular, are expected the
following with the decision on emergency stockholding system based on the
public stock model; Adoption of an action plan for building up emergency oil
stocks to 90/61 days; Adoption of the draft Law on Emergency Oil Stocks,
relevant secondary legislation and necessary amendments to existing laws;
Establishment of a central stockholding entity; Establishment of a monthly data
collection process necessary for operating the emergency oil stockholding
system and meeting the reporting requirements under the Directive.
Note: The here
communication came within the framework of preparation of the analytic report,
about Albania’s and the WBs Oil and Gas Sector Developments, to be release in
the shortly upcoming period by ACERC. In cases of interest to the directly
cooperation as author with analyses or for any kind of involvement or
support as well as a partner, contact us at the info@albaniaenergy.org. For more
keep update with the EU & WBs / Albania Energy Investments Updates
and visit the Official Page of
ACERC.