TIRANA, Feb. 8 – Government has reiterated its intention to complete the privatization of state-owned oil producer Albpetrol by the end of this year. Deputy Economy Minister Sokol Dervishaj told reporters this week that procedures to sell Albptrol continue and that US Patton Boggs, which was selected as an international consultant last year, was going on with the assessment of the oil company’s assets.
According to Dervishaj, the official tender for the company’s privatization will be announced soon after the hired consultant submits its assessment report by the end of next June. Fully confident that the end of 2011 will find the state-owned oil producer privatized, Dervishaj says that recent corruption allegations on tenders and the Jan. 21 tragic events after an anti-government demonstration won’t have an impact on company’s sale.
The sale of the remaining important public assets such as oil producer Albpetrol, INSIG insurer and remaining state-owned shares in fixed-line Albtelecom and power distribution operator would bring another 100 to 150 million euros this year, according to government plans in mid-2010.
Last year, Canadian-based oil and gas exploration company Bankers Petroleum announced it was interested in buying Albania’s state-owned firm Albpetrol which has been put on the privatization list.
In a conference discussing results with analysts, Bankers’ president and chief executive Abby Badwi said Bankers’ bought-deal equity offering that raised $100 million in July was made in part to be able to bid for Albpetrol’s assets.
“We wanted to be able to be proactive when the privatization happened, be able to go and put an offer knowing that we had the funds for it,” said Badwi as quoted by Calgary Herald.
“So, no, we will not be looking for additional financing. Between our cash balances and debt that is available to us of $110 million, we should be in a good position to make a stronger bid for any of these assets. And the numbers are not big. We’re talking about anywhere between 1,000 and 3,000 barrels per day total for Albpetrol, so our bids might be focused only in areas we operate in.”
Badwi said the details of the privatization, to take place in 2011, are not finalized, but he believes Albpetrol’s assets will be sold in pieces.
According to a recent government decision last year, oil products produced by state owned company Albpetrol will be sold based on stock market prices. The changes to the law allow Albpetrol to sell its crude oil products to domestic or foreign markets based on stock prices.
The good financial performance in the first months of 2010 allowed Albpetrol to pay off 8.1 million dollars it owed to state institutions in taxes and bills.
The US company which also served as consultant for the privatization of oil refinery ARMO, was given a deadline of six months to assess the company and decide on the method of privatization.
IMF on Albpetrol
In its latest report on Albania, the International Monetary Fund warned increasing payment arrears from the privatized refinery complex (ARMO) threaten the successful privatization of Albpetrolءnd thereby the conclusion of the strategic privatization program. IMF staff recommended the initiation of legal recovery proceedings against ARMO. Albpetrol sells its product to the Albanian Oil Refiner ARMO, but also has full legal rights to export it.
Albania has 200 million barrels of proved oil reserves. During the last two decades, foreign investors have spent almost 580 million US dollars in exploring projects but until now, few of the resources explored have been viable for production.
