Island steps up Albania exploration program

TIRANA, April 28 – Island Oil & Gas is negotiating new fiscal terms for its Durresi production sharing contract offshore Albania, following the introduction of a royalty tax last August.
The company hopes the new terms will be presented shortly to Albania’s Council of Ministers for review. Currently it is looking for a contractor to acquire 3D seismic readings over its acreage early in 2010.
This program is designed to re-evaluate Chevron/Agip’s oil and gas discovery A4-1X. Island plans to re-enter the well, subject to accessibility, to flow test hydrocarbon-bearing intervals logged in 1993, but not tested due to low oil and gas prices at the time.
It is also looking to deepen the well to older Cretaceous and Jurassic reservoir targets not previously drilled, but which have produced hydrocarbons in offset fields on the same trend in Italian waters.
Island is discussing farm-in arrangements with Australia’s Beach Petroleum, and potentially another company interested in evaluating the near-shore gas potential of the Durresi block as part of a strategy of developing an Albanian gas export market. Island and previous operators Occidental and OMV have mapped several structures that could be contiguous with onshore gas fields.