TIRANA, May 18 – The Albanian government has initiated tender procedures on seven free onshore and offshore oil and gas exploration blocks, offering a series of incentives in a bid to attract experienced foreign investors.
In an announcement published by the National Agency for Natural Resources, the Energy Ministry says it invites companies to submit bids on the three onshore blocks of Block 4 and Block 5 and the Block of Dumre until June 15, 2015.
The Energy Ministry has also announced a tender scheduled for June 25 on four other free exploration blocks, the Joni (Ionian) 5 and Rodoni offshore as well as Block C and Block Panaja onshore.
One of the offshore blocks scheduled for concession overlaps with Greece whose recent search for oil in the Ionian Sea has caused a friction with the Albanian authorities who have called on the neighbouring country to stop its search until the dispute is resolved.
“Part of the Ionian 5 block offered by Albania overlaps with the Ionian Sea area in which Greece seeks to search for oil,” Reuters reports.
The tenders come after government announced earlier this year plans to privatize Albpetrol oil company and offer investors onshore and offshore oil and gas exploration.
Prime Minister Edi Rama has described energy as one of the most important sources of Albania’s growth at a time when the country is set to become a regional gas hub from the construction of the Trans Adriatic Pipeline bringing Caspian gas to Europe through Albania, Greece and Italy.
Earlier this year, the Albanian government announced plans to complete the privatization of Albpetrol oil company after a failed tender in 2012, and make the free oil and gas blocks under Albpetrol’s management available to foreign investors for exploration.
Albania currently has 13 free onshore and offshore oil and gas block which are scheduled for concession.
Foreign investors engaged in oil and gas exploration in Albania are exempted from the 20 percent VAT, can have their exploration stage extended from 5 to 7 years and engage in production from 25 to 30 years.
Studies show Albania’s oil and gas reserves are estimated at 400 million tonnes, of which around 10 percent are easily extractable.
Several international companies successfully operate in Albania’s oil sector which has seen a boost in the past decade thanks to huge investments.
Canada-based Bankers Petroleum which operates the Patos-Marinza heavy oilfield in south-western Albania is the country’s largest foreign investor. Petromanas Energy, another Canada-based company and its Dutch partner Shell have recently made an important discovery from its Shpirag-2 well in Block 2-3, which covers an area of 3,450 square kilometres onshore south-central Albania.
