TIRANA, Dec. 10 – Junior Canada-based Pennine Petroleum Corporation has announced it has won an international tender to explore for oil in Block Velca in southern Albania, raising questions about the experience of the company whose shares at the Calgary-based TSX Venture Exchange are traded at only C$0.02.
The company says it has received notification that the Albanian energy ministry has announced it as a successful bidder for Block Velca. The block is located 10 kilometers southeast of the city of Vlora, in the southern portion of the Balkan nation, and covers an area of 620 km2. The hydrocarbon reservoirs associated with Block Velca are Ionian sub thrust carbonates, similar in structure to reservoirs of the foothills of western Alberta, the company says in a statement.
“This project has significant potential for the corporation, as it develops its geographic, price point and jurisdiction of exploration and development strategy,” said John Garden, Pennine’s CEO who has worked in Albania drilling vertical and horizontal wells.
“Working in Albania and respecting its established legislation and regulations will generate significant interest to the shareholders of Pennine and the people of Albania,” added Garden.
The company and the Albanian government will now have to engage in contract negotiations before the final okay.
Pennine Petroleum Corporation is an emerging oil and gas exploration and development company, currently active in Alberta and Saskatchewan, and expanding internationally with its first Albanian acquisition. The company’s total assets at the end of 2014 were estimated at C$1 million.
Last August, Albania selected a joint venture between Canada-based Petromanas and the Royal Dutch Shell and a subsidiary of Israeli-based Delek Group as the winners of the first two onshore oil exploration blocks. Canada-based Petromanas and Shell Upstream Albania B.V, the Albanian subsidiary of the Royal Dutch Shell were announced winners to explore the onshore Block 4 in south-eastern Albania close to their current drilling site at Shpirag.
Meanwhile, Navitas Petroleum, a subsidiary of Israeli-based Delek Group was announced the winner of Dumre block in central Albania.
Albania 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.
