Albania enters the search game for oil

Albania enters the search game for oil

Yet again (?), Albania is setting the foundations for the exploitation of the resources of its subsoil.

The Albanian government and the Royal Dutch Shell signed an oil exploration deal which foresees major investments in Block 4 in southern Albanian mountain of Shpirag, Berat.

Under this deal, Shell plans investments worth 42.5 million euros in oil and gas explorations over the next seven years while the contract will have a duration of 25 years.

The deal was signed by Albania’s Minister of Infrastructure and Energy Damian Gjiknuri, and the general supervisor Shell Albania for Shell International Exploration and management, Jon-Henk van Konijnenburg.

Edi Rama noted that the presence of a multinational company like Shell in Albania was an additional reason for other international companies to see Albania as a country where everyone else could invest too.

Official statistics show that Albania has oil reserves of 220 million barrels and natural gas reserves of 5.7 billion cubic meters.

The exploitation of Albania’s oil reserves began in 1918 in the Vlora zone. Since then, more than 5,000 boreholes have been carried out.

Albania has made efforts in the past to harness its mineral wealth. Among other smaller companies, Austria’s OMV and Canadian Petromanas Energy Inc. have shown interest. However, the specificity of the soil does not help, as ground hydrocarbon deposits are located at great depths, which makes any investment non-profitable and the depreciation unsafe, especially with the current oil price.

Shell, however, had completed its exploration drilling programme in central and southern Albania in 2013, and the results were, according to a company announcement, encouraging. “The results can support the oil game in Albania,” said Edwin Verdonk, vice president of Shell in Europe.

Italy, too supports what is happening in Albania. Italian Ambassador to Albania, Alberto Cutillo has said:

“The reform is expected to attract more investment. Albania can become the gateway to the entire Western Balkans. Albania deserves the opening of negotiations, and if happens, Albania will be a new challenge for the modernisation of the economic system. Italian companies will support the Albanian ones in European markets. Albania will manage to win, thanks to the cooperation with Italy at all levels.”…/IBNA