Foreign investors interested in Albanian oil

MedOil and Stream Gas Limited signed contracts with the Albanian government regarding exploration and exploiting of hydrocarbons.

Two foreign investors have announced plans for further investment in the search for oil and gas in Albania. The first, Britain's MedOil, has obtained exploration and development rights for hydrocarbons in the Ionian Sea.
At the same time, the international firm Streamoil Gas Limited has signed a contract with the Albanian government regarding the development and production of hydrocarbons at several fields in the country.

Both deals were approved at a cabinet meeting on August 8th.
"These two companies, together with other operating companies in the country, have drastically changed the production of oil in the country, reaching 500,000 tonnes last year," said Prime Minister Sali Berisha. "We expect a further increase this year."
MedOil will be conducting its operations in an area ranging from Karaburun Peninsula to the southernmost Albanian town, Saranda. Official statistics forecast that 1.8 billion barrels of oil reserves can be found. Under the contract, the government will receive between 10% and 60% of the oil revenues, based on the depth of drilling. Analysts estimate that the likely percentage will be between 10% and 12%.

The British firm is investing round $20m in the project over the next seven years. It has the contractual right to exploit the source for 20 years starting from the date oil is found.

Streamoil, meanwhile, will be drilling at the Ballsh-Hekal, Gorisht-Kosur and Cakran-Mollaj fields, as well as at Delvina. The government expects Albpetrol, the state owned company, to triple its income as a result of the Streamoil deal.
There are other foreign investors in the oil industry. Bankers Petroleum, a Canadian-based firm, has been drilling at the Patos-Marinza field since 2004. Bankers has increased its production level to over 4,400 barrels per day at the end of 2006, compared to 600 barrels per day since it took-over the project in July 2004.
Another company, Occidental Petroleum, has been prospecting for oil and natural gas at Mount Shpiragu, 120km south of the capital, since 1991. The search has proved fruitless so far.

Berisha says he is confident about the overall level of foreign direct investment in Albania. "These last weeks we signed several contracts with foreign investors….Their engagement is a clear evidence of foreign companies' focus and determination to invest in Albania."