TIRANA, May 25- The branch of large oil trade company Shell in Albania, namely Shell Upstream Albania B.V., which has been engaged in Albania since 2012, found significant light oil reserves at the mountain Shpirag near Berat. The appraisal well from which the oil was found is called Shpirag-4 and it is estimated through the multi-day production tests on the well, a flow potential of several thousand barrels of oil per day.
Light oil presence in the Shpirag area has been noted since 2013. In Shpirag-4 the reserves potential weren’t verified until recently. The company writes in its website that Shpirag-2 demonstrated the presence of a light oil column of at least 800m in the reservoir. The next step in the appraisal programme is to conduct an extended production test on the Shpirag-4 well, followed by further appraisal drilling at the Shpirag-3 well. In parallel, Shell plans to drill further exploration wells within the acreage it holds to test their potential, as multiple other large but yet untested potential hydrocarbon accumulations have been identified within this acreage, which provide opportunities for future exploration activity.
“The Shpirag discovery was the first in Albania’s onshore ‘fold and thrust belt play’ (the geological setting where the hydrocarbon reservoir sits) in which Shell became involved. We are pleased that these initial tests have confirmed the potential of this discovery and look forward to growing our business in Albania,” said Marc Gerrits, Shell’s Executive Vice-President, Exploration.
Shell became a partner in the project in 2012 and now holds 100 percent equity in the Blocks 2-3 permits and will formally assume 100 percent equity in the Block 4 permit later in 2019. The combined acreage of the Blocks 2-3 and Block 4 permits is 4,084 square kilometers. Earlier in 2018, Albania concluded an oil exploration contract with Shell that would see the oil giant invest another 42.5 million dollars over the next seven years in southern Albania, making it one of the few big Western investors with a presence in Albania. Once assuming Block 4, the development/production contract will be valid for 25 years with an option of renewal.
As this is good news for the company, it is also good news for the economy as well, because the country will receive profits from the first produced oil barrel from Shpirag. Minister of Energy and Infrastructure Belinda Balluku said in a joint press conference with Shell representative Rohan D’Souza, that this is the most major oil discovery in the last 30 years.
“The Shell company has been persistent in its drillings in Shpirag-4 well, where previous findings have confirmed the quality of crude oil and the existence of potential oil reserves. Also, the results confirm that the oil-bearing structure is of high porosity, thus making oil extraction easier and consequently less costly,” said Balluku in the conference.
She added that confirmation on Shpirag-4 Shell gives Shell a guarantee to continue its production works by becoming an important player in the oil and gas market in Albania. This discovery will have important implications for the Albanian economy both for the company and for the state. As stipulated in the deal with Shell, the Albanian state benefits from the mining, its share of production and the profit tax since the first barrel produced.
Shell Rohan D’Souza’s representative underlined that currently the company is still in the assessment phase in Blocks 2 and 3, and further drilling and testing is required to increase knowledge about the reservoir and the potential for commercial production. He said that recoverable volumes are still to be determined, while the next step in this evaluation program is to conduct an extended test at Shpirag-4 to make other drilling in other wells that can lead them to pilot rating ease.
“We are pleased to fulfill what we started in Albania and to continue with investments,” said D’Souza.
