Britain’s MedOil to explore for offshore oil in Albania

TIRANA, Sept. 4 – Albania signed Monday a $26.5 million with Britain’s MedOil PLC Monday for oil exploration rights in its Ionian and Adriatic Seas, according to the Ministry of Economy, Trade and Energy. A day later a statement from MedOil said it had signed a Petroleum Sharing Agreement (PSA) with the Ministry of Economy, Trade and Energy in Tirana. The PSA is for seven years with a drill-or-drop decision after the second and fifth years. MedOil’s initial obligation is for 400 sq. km. of a 3-D seismic work program in the first two year period with a minimum work expenditure of USD 2.05million. The ‘Joni -5’ offshore permit is approximately 2,500 sq. km. in area, offshore southern Albania, extending to the northern boundary of Greece with water depths ranging from the coastline up to 800 meters. MedOil, a London-based oil and gas exploration company working mostly in the Mediterranean and North Africa region, will carry out exploration in three stages in the Ionian Sea from the Karaburun Peninsula to the southernmost town of Saranda, and in the Durres area in the Adriatic Sea, according to a statement. The contract will be prolonged to 20 years if exploration comes out positive and a well has to be drilled.
The area was explored from 1992 by Australia’s Hamilton Oil, but it left after three years having failed to find anything. Albania produces about 350,000 tons of oil annually.
The PSA will now be presented for ratification by the Council of Ministers, which the directors expect to take place in late October.