31 March 2016
In May 2015, Albania initiated an international call regarding seven oil and gas onshore and offshore blocks. The Albanian competent governmental institution, the Albanian Agency of Natural Resources (AANR), has publicized the map featuring the free blocks for exploration. Considering Albania’s high potential of oil and gas reserves, this is a good opportunity for foreign companies to invest in Albania.
Albania is a country rich in oil and gas reserves, but its resource base is almost completely undeveloped. Albania gives priority to foreign investments in the oil and gas exploration, considering it a good opportunity for the country’s development. According to data of the Bank of Albania, the extracting industry accounts for 58% of the total of foreign investments in the country.
The Albanian government offers incentives with the aim to attract and facilitate new investments in this field due to the high potential that this sector has for the development of the economy. Another factor that has further improved the attractiveness of the oil and gas exploration sectors is the increased investment in infrastructure and the considerably improved road transportation network in Albania.
The Albanian Agency of Natural Resources constantly promotes the oil and gas free zones. In June, the Minister of Energy and Industry launched the international call for seven free new zones for gas and oil exploration and production. These zones would be available for bidding in an open process, where the winner will be chosen through predefined criteria. The AANR has announced that the new deadline for applications in relation to Onshore Blocks PANAJA, C and 5 is November 30th, 2015.
The free zones are administered by AANR or Albpetrol (a state owned company). All entities interested in entering into a Petroleum Agreement should contact either AANR or Albpetrol, depending on who is the administrator of the respective zone. The Ministry of Energy provides the approval for the commencement of negotiations. Once the parties involved reach a final agreement it must be approved at the Ministry of Energy. After the fiscal and legal revision the agreement must also receive the final approval of the Council of Ministers.
Natural resources are a valuable asset for Albania and for the country’s economic development. The new free research and production zones aim to attract important foreign investors. Additionally, Albania provides fiscal advantages in the oil and gas research and development phase, making it an excellent investment location for international companies active in this sector.
Article by EUROFAST GLOBAL SHPK
Photo by: D H Wright