TIRANA, Feb.20 – The Ministry of Economy and Energy announced Tuesday the opening of the tender for 85 percent of the state oil company ARMO. Until May 2008 companies will be invited to participate in an informational phase which will be followed by the bidding phase. An advertisement for the tender has been published in many international media and priority will be given to strategic investors. Following the dale, the Albanian government will retain 15 percent of the shares. ARMO is a critical part of the privatization planned for important state owned monopolies.
Last year, the public company ARMO, which processes and markets all Albanian domestic oil, announced that it has opened a bid for selling no less than 20.000 tons of crude virgin oil for a total value of $13 million. Currently, the price varies around $680 per ton.
Privatization
Though Economy Minister Ruli had declared that the final date of the privatization of ARMO would be the end of 2008, internal sources in the company say that it might be completed within the first quarter of 2008. The American company, Pattom Bogs, recruited by the Albanian administration as consultants on the process, announced its results at the end of November 2007. The Finance and Economy ministries claim ARMO is worth around $100 million. The Canadian-owned Bankers Petroleum, which currently has a concession for using the site at Patos-Marinza, has expressed its interest in this bid.
ARMO
ARMO produces nearly 30 percent of the oil that is consumed in Albania and has a market share of 25 percent. Experts say that this discrepancy is due to a lack of adequate management throughout the years. In the first quarter of 2006, the producing unit of ARMO reached a new production record for the last 15 years by producing no less than 120.000 tons. Experts say that the producing potential of ARMO has remained unexplored in order to illegally assist the interest of importing firms.
Up through 1994, ARMO had a monopoly on oil markets and 1995 saw the first Albanian oil exports to Montenegro. In 1998 a crisis began with technology degrading and oil produced by Albpetrol sh.a. dropped to only 300.00 tons annually. Out of this, ARMO processed only 100.000, 70 percent oil and 30 percent gasoline. In 2000, the market price of oil in the international markets rose from $22 per barrel to $35, which tremendously increased the cost of imports. This was favorable to ARMO which increased its own products’ price. Generally, ARMO keeps the price at 5-6 lek less per barrel than imports, creating a sort of legalized dumping which is justified in strategic sectors such as energy.
