TIRANA, Dec. 2 – With international oil prices standing at a record low, the Albanian government has postponed privatization plans on the country’s state-run Albpetrol oil company.
“The history of Albania’s oil industry has shown that in case of a drop in international oil prices there is a drop in interest in oil fields by foreign companies. This had made us quit our privatization plans for the moment because of the drop in oil prices and the existence of the risk of oilfield abandonment because of low interest,” said Gjiknuri.
The energy ministry says that despite oil prices at a record low, contract negotiations with the Royal Dutch Shell and the Israeli-based Delek Group are on track to finalize after the two companies were announced winners of two onshore oil exploration blocks in international tenders held few months ago.
The energy minister said Albpetrol was handling the decline in oil prices well by operating at its own revenue.
“Albpetrol needs reorganization to become more efficient but at the same time, it is a structure which under all circumstances needs to be on alert for every unexpected situation,” said Gjiknuri, introducing the 2016 budget of the energy ministry at the parliamentary productive activities committee.
In its 2015-2017 national economic reform programme, the government says it plans to restructure Albpetrol oil company, the biggest remaining state run company whose privatization in 2012 registered a spectacular failure after a fake Euro 850 million bid by an Albanian-led consortium.
Government had set up a working group with technical assistance from the IFC, the World Bank’s private sector lending arm, to study Albpetrol’s restructuring and identify its proper form of sale or a public-private partnership in a bid to increase production, employment and investment in the oil sector.
Prime Minister Edi Rama has earlier described Albpetrol as an atavistic and hybrid enterprise under state management during the past two decades of Albania’s transition to a market economy.
In early 2013, the Albanian government invalidated a staggering bid worth €850 million on the privatization of Albpetrol oil firm after the winning bidder, Albanian-led Vetro Energy consortium, failed to pay the financial guarantee leading to the finalization of the contract. Albpetrol currently runs only 5 percent of the oil wells, some 1,200, while the remaining overwhelming majority is managed by foreign companies on concession contracts. The company’s assets are estimated at Euro 95 million.
