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EU & WBs / Albania Energy Investment Updates

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ACERC is a think tank centre with focus on the Albania energy market and its integration in the regional IEM. The Acerc mission base on the in-depth knowledge of EU and regional energy law and policy and strives to provide a qualified contribution to the promotion of the liberalization and effective integration as well as efficient use of energy resources.

main activities briefly consists in build-up collaborations and supports to market players in study researches such as the certificate reports, articles and periodicals. The transfer of high expertise through building-up institutional capacities by national and regional training courses, seminars and conferences. The institutional representation and integration within framework of the forum of Albanian School of Regulation.

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Albania calls for oil & gas exploration bids

AEI Updates June 2015 Posted on Fri, June 26, 2015 21:35:57

Albania’s National Agency for Natural Resources, (AKBN) has issued the invitation for interested hydrocarbon companies to apply for exploration of free offshore blocks in Albania’s territorial seas.

After the head of Albanian Ministry of Energy and Industry (MEI), Damian Gjiknuri, announced in March this year that the Albanian government will carry out the seismic profiling in the free marine blocks, AKBN invited interested companies last week to apply for Joni 5 and Rodoni free offshore blocks.

The blocks are located in the Ionian Sea and the Adriatic Sea, respectively, offshore Albania. The deadline for application is June 25, 2015.

The AKBN has also invited all interested hydrocarbon companies to apply for free onshore blocks including Block 4, Block 5 and Block of Dumre, with the deadline for application being June 15, 2015.

The Minister also said that IIlia Gjermani will be MEI’s representative of a negotiating group that will be created for drafting the Basic Terms and Conditions of the Hydrocarbon Agreement.

According to minister’s order, AKBN will be in charge for evaluating the applications and forwarding the ones they find worthy to MEI for approval within 10 days from the deadline for the applications.

MEI will approve or reject the winning company for exploring offshore blocks within 7 days of receiving the proposal from AKBN, which means that the winning company, should there be one, will be known by the end of July 2015.

In March this year, the MEI held “Albania Oil, Gas & Energy 2015,” a two-day event where companies such as Shell, BP, Exxon Mobil, Anadarko, ENI, and Repsol were the special guests. At the event, Minister Gjiknuri said that the government will conduct competitive negotiation procedures to attract more serious companies that could afford investments in new research in Albania, in order to avoid past failures, where oil blocks were given to those “who were unable to fulfil the commitments made”.

Terms and Conditions of Production Sharing Agreements of Albania Free Exploration Blocks, Lorenc Gordani | Thursday, June 26, 2015

AEI Updates June 2015 Posted on Fri, June 26, 2015 16:37:48

The Albania Ministry of Energy and Industry, has
announced the open of available Areas 4, 5 and Dumre, C and Panaja with deadline
of application 15.07.2015. Meanwhile for the onshore and other offshore Areas,
due to the consolidation of seismic data, to a postponed period. The
“Petroleum Law”, No. 7746, date 28.07.1993, authorizes the Ministry
to enter into a Production Sharing Agreement (PSA), for exploration,
development PSA based on the following Terms
and Conditions of Production Sharing Agreements.

According to “Petroleum Law”,
“Petroleum Operations” means all or any of the operations related to
the exploration for development, extraction, production, separation and
treatment, storage and transportation and sale or disposal of petroleum up to
the point of export, or to the agreed delivery point in Albania or the point of
entry into a refinery and includes natural gas processing operations but does
not include petroleum refining operations.

Hydrocarbons existing in their natural state are the
property of the Albanian State. The Government represented by the National
Agency of Natural Resources (Decision No. 445 dated 03.09.2006) authorizes the
performance of petroleum operations by the National Oil Company (Albpetrol) in
its exclusive areas, or a Contractor in remainder of the territory of Albania.

The National Agency of Natural Resources is authorized
to make available to interested oil companies the existing geological and
geophysical data on the free areas in order to give oil companies the
opportunity to evaluate the data before submitting applications. The contract
type is the Production Sharing Contract (PSC) between National Agency of
Natural Resources, acting on behalf of the Albanian Government, and the

According to the “Petroleum Law”,
“Production Sharing Agreement” means a Petroleum Agreement which
provides for the recovery of Contract Costs from Petroleum produced in the
Contract Area or from a proportionate part thereof, and for the division
between the State and the Contractor of the balance of petroleum remaining
after the recovery of Contract Costs in accordance with a scale or formula
specified in the Petroleum Agreement.

The Production Sharing Agreement includes provisions
such as: The performance of a minimum work program, backed by a performance
guarantee; The presentation of an annual work program and budget; Preference
given to local employment and supplies during petroleum operations, where these
are competitive in terms of quality, availability and cost; The opportunity for
local service companies to bid and preference given to them when the offer is
comparable or better than other third parties. Indemnify the State or the
Ministry against all claims made by third parties in respect of injury, loss or
damage resulting from the conduct of any operation carried out by the
Contractor or by any subcontractor.

“The Petroleum Law” deals with access to
private land after giving the occupier and the owner a minimum time notice.
However, the Contractor must pay fair, just and equitable compensation with
regard to any disturbance or damage caused during the conduct of petroleum
operations. The P.S.C. provides for the establishment of a training and
administration fund, which is used for the training of National Agency of
Natural Resources employees, and for administrative purposes.

The Contractor shall conduct petroleum operations in a
safe and proper manner in accordance with generally accepted international
petroleum 7 industry practice and shall cause as less damage as is reasonably
practicable to the general environment including (inter alias) the surface,
air, seas, lakes, rivers, marine life, animal life, plant life, crops, other
natural resources and property, and shall forthwith repair any damage caused to
the extent reparable, and shall pay reasonable compensation for all damage
which is beyond repair.

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