Offshore company to reactivate domestic oil refining

Tirana Times
By Tirana Times September 1, 2016 12:49

rafinTIRANA, Sept. 1 – An offshore company based in the British Virgin Islands has offered to reactivate domestic oil refining following the bankruptcy of Armo refiner which has left hundreds of workers jobless since more than a year.

Canada-based Bankers Petroleum, the country’s biggest oil producer that is about to be taken over by a Chinese company, has signed a preliminary  crude oil sale deal with Ionian Refining and Trading Co. – IRTC SH.A., a newly established offshore in March 2016 at the British Virgin Islands and also registered as a joint stock company with Albania’s National Business Center last June with its Albania seat in Tirana.

The company’s shareholders remain unknown but the administrator is an Albanian manager who previously worked with TPD-Trading Petrol & Drilling” an Albanian operator part of the Sulaj Progres Group which also operates in real estate development and entertainment industry.  Back in early 2015, the company purchased 100,000 tonnes of crude oil from Albpetrol oil company for around $31 million (€28.7 mln) at 72 percent of crude oil Brent price of around $66 a barrel at that time to process it at Armo’s refineries.

Earlier this year, nineteen individuals, six companies and two offshore entities linked to Albania were disclosed in a searchable database that strips away secrecy of hundreds of thousands of offshore entities globally as part of a massive leak of the so-called Panama Papers.

Bankers Petroleum says the deal will become effective upon receipt of the Albanian government’s approval of the company’s proposed drilling program for the final quarter of the year and an agreement with state-run Albpetrol company to handle its share of volumes from the Patos-Marinza oilfield, Europe’s biggest onshore oil field.

The offshore company is expected to reactivate the Fier and Ballsh refineries under Armo refiner’s possession with oil deliveries scheduled from October 2016 through December 2017.

Bankers says it may sell up to 65 percent of its crude oil production under the agreement. Bankers Petroleum, the country’s biggest oil producer which has been operating in Albania for more than a decade, will be taken over by China’s Geo Jade for C$575 million (€392 mln). The deal is expected to be concluded in late September following a final approval by the Chinese State Administration of Foreign Exchange, SAFE.

The takeover follows a slump in international oil prices and tax disputes with the Albanian government finally settled in Bankers’ favour.

Hundreds of oil workers from the bankrupt ARMO refiner in southern Albanian town of Ballsh staged protests in Tirana this year, calling on the government to find a solution to the resumption of oil operations so that they can make a living in their poor town where the refiner has been the top employer over the past decades.

The bankruptcy of Albania’s oil refiner ARMO and its stop of operations led to 20 percent in fuel imports in the first seven months of this year, when Albania met almost all of its domestic consumption with imports of more than 288,000 tonnes.

Last February, a Tirana-based private bailiff failed to sell several key assets by ARMO oil refiner whose minority 15 percent stake is still held by the Albanian government following its botched privatization back in 2008. The company’s auction came more than two years after an Azerbaijani-based company took over the majority 80 percent stake in ARMO and the company’s continued accumulation of debts to creditors and the government in unpaid taxes.

“We cannot nationalize it because a lot of banks have been involved and the case would take a lot. The important thing is finding a solution to restructure the company,” Energy Minister Damian Gjiknuri told Parliament earlier this year.

The company’s debts are estimated to have amounted to $600 million.

Back in 2013, Azerbaijani-based Heaney Assets Corporation took over 80 percent of ARMO shares from Albanian businessman Rezart Taçi for an undisclosed amount, committing to pay off the company’s huge debts, but left the country in one year.

The refiner was privatized in 2008 when a consortium led-by Albanian businessman Rezart Taçi’s Anika Enterprises bought an 85 percent stake in ARMO oil refiner for €128 million. The deal was financed by the Azerbaijani state bank.

ARMO’s assets include two refineries in Ballsh and Fier and one thermal power plant, built in the 1970s under communism.

Tirana Times
By Tirana Times September 1, 2016 12:49