US-Swiss consortium signs contract to buy Albania’s ARMO state oil company

TIRANA, Aug 23 – The Albanian government has signed a contract to complete the sale of 85 percent of the Albanian ARMO state oil company after negotiating terms with a U.S.-Swiss consortium in a deal worth 128.75 million (US$191 million), authorities said on Saturday.
The consortium, made up of Texas-based Refinery Associates of Texas and Geneva, Switzerland-based Mercuria Energy Group Ltd. and Anika Enterprises, won the international tender in June and held negotiations on the terms, according to officials in the Albania’s Economy, Trade and Energy Ministry said.
Also, a contract guarantee of 20 percent of the price was handed over to the ministry, a statement said.
Based on the contract signed Friday, the consortium would invest US$250 million (168 million) in the next five years, including US$50 million (33.6 million) for environmental protection issues during the first three years.
Further, the consortium cannot sell its shares without consulting the ministry during the first five years, the contract said.
The government also retains 100 percent of dividends until the contract comes into power.
ARMO owns two refineries, a research center, 11 depots and a network of gas stations, which it says were worth 109 million (US$161.8 million) in total. The Albanian government is planning a large round of privatization in 2008, the distribution branch of Albania’s power utility, KESH, and the state-owned insurer, INSIG, will also be sold off later this year. (Tirana Times Staff)