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.

For more keep update with the EU & WBs / Albania Energy Investment Updates or visit the Official Page of ACERC.