AlbaniaAlbania occupies a pivotal strategic geographic position in South-East Europe, being the closest point in the Adriatic Sea to the Italian mainland and the vast natural gas and LNG market of Southern Europe. South-East Europe lacks significant indigenous gas resources: for example Greece has no domestic gas production but is supplied with gas from Gazprom (through Bulgaria), LNG (via Sonatrach in Algeria) and via the Turkish gas infrastructure network. There are plans for a West Balkan gas pipeline to transit gas from Turkey through Greece to the West Balkan Region and from there to Austria. There are also plans for an interconnector between Greece and Italy and potentially for oil and gas interconnectors (‘AMBO‘ and ‘TAP’) between Albania and Italy to carry Caspian and Black Sea oil and gas to Italy and, if appropriate, from there to Europe. Security of Western European gas supply is currently a significant political issue, with the long term objective being to diversify the sources of gas supply by by-passing the Russian gas export infrastructure. Conversely the Balkan region is also seen as an alternative export route for Russian oil and gas (with a Russian-built oil pipeline to the port of Vlora in Albania and an LNG plant in Bosnia being considered). Albania has been a republic since 1991 and has made significant political and economic progress since that time, culminating in the signing of a European Stabilisation and Association Agreement. GDP and Per Capita Income has increased steadily since 1999. A favourable investment environment is being promoted. The EBRD is actively investing in Albanian infrastructure projects. Albania’s medium term objective is to apply for membership of the European Union which, if achieved, will act as an additional catalyst for economic growth and the development of More than 3,000 wells have been drilled in onshore Albania in what is a proven hydrocarbon province. Oil production peaked at 50,000 bopd in the mid-1970s but then declined rapidly due to lack of investment in new secondary recovery technologies to rehabilitate depleting fields. The largest onshore field, Patos-Marinza, is currently being rehabilitated by Bankers Petroleum and is producing over 6,600 bopd. Target production levels are 20,000 bopd by 2010. Gas production in Albania reached 0.2 billion cubic metres per annum (‘bcma’) from the 1970s to the end of the 1980s but currently there is minimal domestic gas production. Since 1991, only six wells have been drilled onshore Albania and six wells offshore. The only significant discovery made in that time was made by Chevron/Agip in 1993 in Island’s Durresi Block. OMV, the previous licence holder, has estimated potential resources of 38 mmb of condensate (54 degrees API) and 151 bcf of gas. Two oil refineries are operational but have limited capacity. Some oil is now exported directly to refineries in Italy. The onshore oil and gas pipeline infrastructure requires investment in upgrading and maintenance. Albania represents a developing market with high potential in a proven hydrocarbon province where full exploitation of its indigenous oil and gas resources potential is lacking due to under-investment in recent times. It is therefore an ideal candidate for the Island business model. |
