TIRANA, Nov. 16 – The sharp cut in international oil and base metal prices during the past year is having a negative impact on Albania’s oil and mining sector which has cut production and staff to minimize losses also affecting the country’s exports and the key royalty tax the government collects.
U.S.-based TransAtlantic Petroleum, which is also engaged in oil operations in Turkey and Bulgaria, has recently announced it is selling its loss-making Albanian unit due to a significant decline in oil prices and lack of credit.
“The company’s board of directors has authorized the immediate launch of a marketing process for the sale of all of the company’s oil and gas assets and operations in Albania,” the company said in a statement.
The announcement comes one year after TransAtlantic acquired Canada-based Stream Oil & Gas for $28 million. Its assets include the Gorisht, Cakran and Ballsh oil fields and the Delvina gas field in southern Albania.
TransAtlantic said it will continue the execution of its current operational plan focusing on low cost and high return operations. The company’s current net production in Albania as of November 13, 2015 is approximately 700 barrels of oil per day.
In its third quarter financial results, TransAtlantic said it planned to pursue “additional financing, or seek a refinancing, strategic transaction, sale of all or a portion of the assets (including operating control), joint venture, private restructuring, or pursue a reorganization or liquidation of Stream under applicable governing laws.” The company says its access to capital has been severely restricted due to the significant and continued decline in oil prices and the reluctance of credit and equity participants in energy markets due to the ongoing conflict and turmoil near Turkey in Syria and Iraq.
The company reported losses of about $5 million for the first three quarters of this year in its Albania operations.
“In Albania, we intend to seek a final solution during the fourth quarter. I am pleased with the effective cost-cutting and de-leveraging milestones that we have made to date,” said Malone Mitchell, the TransAtlabtic CEO.
The sharp cut in international oil and base metal prices has also affected production by Canada-based Bankers Petroleum, the country’s biggest oil producer while a Turkish-Chinese consortium operating a copper plant in the northern Albanian district of Puka has announced the suspension of its activity for one year, leaving hundreds of workers jobless.
