Albpetrol JSC is a stock company, 100% of stokes owned by Albanian State. The company’s headquarters is located in Patos city. In 2014, Albpetrol JSC has opened a representative office in Tirana. The main role of this company is the production and marketing of petroleum products as well as monitoring of the Petroleum Agreements. History of Albanian oil begins in 1918, when Leo Madalena (Italian geologist) drilling of the first well near Drashovica region (Vlorë). The well reached the depth of 200 m with positive results, despite the small amount of oil received.
Those results attracted the attention of major era companies as Anglo-Persian “APOC Oil Company” and Americans “Standard Oil”. Since this time, in Albania are drilled more than 5,650 oil and gas wells. In the natural gas fields resulting 255 gas wells from 500 wells drilled. In five oil fields result 4728 oil wells.
Albania currently has 12 known oil deposits and 5 natural gas deposits. Only in Patos-Marinëz area, in an area of 44 thousand hectares, is the largest oil-bearing zones in continental Europe. Its underground is estimated to be approximate 2,75 Billion bbl crude oil. Albpetrol JSC Society is created with the Government Decision No. 159 dated in 20.3.1993, with 100% state capital, which operates according to the norms and rules of the market economy, with the object: research and production of the hydrocarbons, which included a full cycle of works seismic, geological, engineering, geophysics, research, extraction, processing and petroleum products marketing.
Today the Albpetrol JSC Headquarters is in the kilometer 7 of Fier-Patos road and is directly responsible to the Ministry of Energy and Industry.
Society Activities
The activity of Albpetrol JSC Socitey is:
- Conduct of the Petroleum Operations in accordance with Law No. 7746, dated 28.08.1993 for the research, development, production, handling (treatment), transportation, storage and sale of the crude oil, gas and bituminous sands inside and outside the Republic of Albania
- Conduct of any other commercial or services operation that serves activity of Society. Society within the space provided by the legislation in force shall carry out any planner – preventive operation, commercial and financial, directly or indirectly associated with its object. This one includes also the opening of the activity and the establishment of other companies within and outside the country, as well as any other possible and lawful activity consistent with its interests.
The realization of the object of company activity shall be achieved through:
- The Exploitation and development of the existing oil-bearing zones and gas-bearing of the country,
- New research and development of the blocks in administration
- Exploitation of bituminous sands.
Attributes of ex-APC (Albania Petroleum Corporation) in Tirana, dealing with the research-producing hydrocarbons passes Albpetrol JSC society, starting from 01/04/2003. The power to supply qualified customers with electricity, gas and transportation.
Environmental permit for the activity with spotting in the environments in the oil fields in Kuçovë, Patos-Marinëz (Driza+Goran), Ballsh-Hekal, Amonicë, Gorisht-Kocul areas, in gas fields in Divjakë (Lushnjë), Frakull (Fier), Povelçë (Fier), Finiq (Sarandë) area, transmission network of oil and gas products, bituminous sand field Kasnicë (Fier), Kuçovë and Patos Mechanical Plants.
History of Albanian Oil
The period of the 1990s
In the period before 1990, Albpetrol JSC was one of the largest undertakings of the Albanian State and one of the largest contributors to income in state budget. The transition years brought a setback and a reduction of society activity. In mid-1990s in Albania came world oil companies, which take by concession the oil fields administered by Albpetrol.
This made a change in the company role, which today is not only oil production, but also functions as a regulatory entity and a controller of related hydrocarbon agreements between Albanian State and Foreign Companies. Oil and Gas Industry will continue to have a primary role in the economy of our country, not only for the fact that employs a significant number of employees, but also for the income that the state benefits from this beneficial industry.
Techniques and the used technologies
For extraction of oil from the wells, today are used these exploitation methods:
- a) Wells Exploitation with common piston pumps
- b) Wells Exploitation with common piston pumps, injecting hydrocarbon and non-hydrocarbon diluents (solvent).
Albpetrol JSC has planned to replace a part of traditional pump with the pumps with screw (PCP). This technology is highly effective for the environmental protection and the energy saving at 50% compared with the wells exploitation with piston pumps.
The pumps with screw are one of the major investments forecast by Albpetrol JSC Company for 2014. This investment is expected to increase significantly the work efficiency of the company and the amount of crude oil extracted from the Albanian underground.
Why pumps with screw
In 90% of the oil wells in world are used with depth pumps (piston pumps). The technique and the technology of wells exploitation with oil viscous using the pump with screw is the best way for estimate the production potential of wells. Pumps with screw have approximately 50 % less consumption of energy. The pumps with screw ensure maximum environment protection in the head wells, also in all oil and gas fields. The studies signify that the pumps with screw can be used in sandstone deposits. From this technology application is providing an effectively of 123 tones/year additional per well.
The effectively of pumps with screw
Pumps with vibration
3467 total working days
Extracted Oil 6448.4 Ton
Average Debit 1.85 tons/day/wells
The coefficient of exploitation 0.966
The consumption of active electric energy of 54.7 kWh / Ton
The consumption of reactive electric energy of 325.7 kWh / Ton
The average efficiency achieved by this technology was considered:
- The increasing of average debit, 14%
- The reduce of active energy, 14.6%
- The reduction of reactive power, 4 times
Oil exploration blocks
Legal Basis
Law No.7746, dated 28/07/1993 “On Petroleum” as amended;
The Regulation ‘On the procedures of the Petroleum Agreements approval and Agreements License’, approved by Ministry of Economy, Trade and Energy;
Law No. 10081 dated 23/02/2009 “On licenses, authorizations and permits in the Republic of Albania”.
The hydrocarbon agreement should pass on these procedural steps to be adopted:
The interested entities present an application to access the Petroleum Agreement to NANR (National Agency of Natural Resources) (in the case of areas that are in NANR administration) or to Albpetrol (in the case of areas that are in Albpetrol administration).
NANR or Albpetrol, within 15 days from receiving the application, submit to the Ministry of Energy and Industry (MEI) the necessary documentation and the request for approval of the negotiations beginning.
MEI gives the approval or rejection to begin the negotiations within 10 days of receipt of the proposal from NANR or Albpetrol. In the case of approval of the application by MEI, the representatives of Albpetrol or NANR begin the negotiating with interested subjects for the Principle Terms and Conditions of the Petroleum Agreement. Once agree, the document shall signed by both parties and shall submit to the Ministry for approval within 10 days from the signing date.
MEI gives its approval or rejection of the Principle Terms and Conditions of the Agreement within 10 days for receiving the signed document of the Principle Terms and Conditions of the Agreement. In case of the approval of the Principle Terms and Conditions of the Petroleum Agreement, Albpetrol or NANR begin negotiations within 30 days of receiving approval for the Principal Terms and Conditions of the Petroleum Agreement.
NANR or Albpetrol send to Ministry for approval of the final draft of the Petroleum Agreement within 15 days from the date of its signing, on every page by the parties.
When the draft is sent for critique, then the renegotiation and the review of the draft shall make within 20 days from the date of receipt the critique.
The draft signed by the parties, may be sent by MEI for critique and review by the fiscal and legal parts, respectively in the Ministry of Finance and Ministry of Justice.
The renegotiation and review of the draft, in the following of critique and opinions that may have by the fiscal and legal ministries is achieved within 20 days of receiving the critique and opinions, than is agreed for renegotiation and revision shall sent to MEI within 10 days.
MEI signs the Petroleum Agreement within 10 days from receipt of the renegotiated agreement, in the cases of NANR administration areas, and then sends it for final approval to Council of Ministers.
MEI gives the approval for signing of the Petroleum Agreement within 10 days of receipt of the renegotiated agreement, in the cases of Albpetrol administration areas, and then sent for final approval to the Council of Ministers.
Agreement license should pass in the following steps to be adopted.
Albpetrol within 10 days from the MEI approval of the Principle Terms and Conditions of the Petroleum Agreement presents to NANR the request to obtain a license agreement;
NANR within 30 days prepares and sends to Albpetrol the Agreement License draft which is discussed between Albpetrol and AKBN for a period time of 50 days;
The final draft, signed on each page, shall be submitted within 10 days in MEI for approval and signature. Within 10 days MEI sign or require making changes on it.
In the cases of changes, these one should be completed within 30 days, and the revised draft of Agreement License shall resubmitted for signature.
This license will be signed by the Minister and Albpetrol within 10 days from the date of Petroleum Agreement approval by the Minister.
Companies
Albpetrol JSC Company controls the oil deposits and deposits in Albania. Starting from 2004, in the territory of the Albania Republic operates five companies, which have signed the Petroleum Agreement with Albpetrol JSC. While a “joint venture” created by Royal Dutch Shell and Petromanas has search permission in the Shpiragu area, Berat district.
Companies:
Bankers Petroleum Albania Ltd.
Sherwood International Petroleum Ltd.
Transoilgroup JSC
Stream Oil & Gas Limited
Phoenix Petroleum JSC
Petroleum Agreements
| Deposits |
Petroleum Agreements |
| Patoz – Marinza |
Albpetrol sh.a & Bankers Petroleum Ltd. Approved by the Council of Ministers, Decision No. 477, dated 16.7.2004. |
| Kuçova |
Albpetrol sh.a & Sherwood International Petroleum Ltd.
(Branch of Bankers Petroleum Ltd.) Approved by the Council of Ministers, Decision No. 686, dated 19.10.2007. |
| Cakran – Mollaj |
Albpetrol sh.a & Stream Oil & Gas Limited. Approved by the Council of Ministers No.509, dated 8.8.2007. |
| Ballsh-Hekal |
Albpetrol sh.a & Stream Oil & Gas Limited. Approved by the Council of Ministers No. 509, dated 8.8.2007. |
| Gorisht – Kocul |
Albpetrol sh.a & Stream Oil & Gas Limited. Approved by the Council of Ministers No. 509, dated 8.8.2007. |
| Delvina |
Albpetrol sh.a & Stream Oil & Gas Limited. Approved by the Council of Ministers No. 509, dated 8.8.2007. |
| Visokë |
Albpetrol sh.a & IEC Visoka Inc (Transoil grup sh.a). Approved by the Council of Ministers, Decision No. 90 i Vendimit, dated 27.01.2009 |
| Phoenix Petroleum sh.a |
Albpetrol sh.a & Phoenix Petroleum sh.a.
Approved by the Council of Ministers, dated 16.08.2013 |
Hydrocarbon Agreements allow the third parties to conduct petroleum operations in the abovementioned areas. Based on these agreements, the Albpetrol JSC right to conduct petroleum operations is limited, but while the society recognized some important rights.
Bankers Petroleum Albania
Bankers Petroleum is the largest foreign investor in Albania in oil field in Albania. Based on the license agreement signed with NANR, as well the Petroleum Agreement with Albpetrol JSC, Bankers Petroleum operates and has the full develop rights in Patos-Marinëz area and Kuçova for 25 years. Patos Marinza is the largest area of oil field in Continental Europe.
It is forecasted that in Patos-Marinëz area found about 2,75 Billion bbl. Kuçova area is estimated to have 504 297 791 bbl.
Bankers Petroleum owns the 7-year exploration license for the area called “Block F”, a continuation of the Patos-Marinëz area, which has the natural gas prospect.
The duration of Petroleum Agreements
Bankers Petroleum Albania Ltd. (1 Petroleum Agreements)
The effective Date: 16.07.2004
The evaluation period: 18 + 6 months from the Effective Date
Development and Production Period: 25 + 5 years from the Effective Date
Sherwood International Petroleum Ltd. (1 Petroleum Agreement)
The effective Date: 19.10.2007
The evaluation Period: 39 months from the Effective date
Development and Production Period: 25 + 5 years
Transoil group JSC (1 Petroleum Agreement)
The effective Date: 27.01.2009
The evaluation Period: 18 + 6 months from the Effective Date
Development and Production Period: 25 + 5 years from the Effective Date
Stream Oil & Gas Limited (4 Petroleum Agreements)
The effective Date: 08.08.2007
The evaluation Period: 18 + 6 months from the Effective Date
Development and Production Period: 25 + 5 years from the Effective Date
Phoenix Petroleum JSC (9 Petroleum Agreement)
The effective Date: 08/16/2013
The evaluation Period: 18 + 6 months from the Effective Date
Development and Production Period: 25 + 5 years from the Effective Date
Note: The agreement “On the Petroleum development and production in Amonica oil field” will be closed on May 17, 2014.
Emanuelle Adriatic Energy Ltd. (offshore, 1 Petroleum Agreement)
The effective Date: 06.06.2012
Research Period:
Phase I: 2.5 years + 180 days from the Effective Date
Phase II: 2.5 years + 180 days from the Effective Date
Phase II: 2 years + 180 days from the Effective Date
The evaluation Period: The period of x determined depending on some circumstances + 6 months from the Effective Date
Development and Production Period: 25 + 5 years from the Effective Date
Royal Dutch Shell and Petromanas
Both companies have announced that the tests conducted in the area Shpiragu (Berat) provided very positive results. For this reason the the search operations are carried out in a third well in Molishti area. In the case that operations will results successfully, Albania oil-bearing stocks can be doubled. Royal Dutch Shell owns 75% of the shares and has the investor’s status, whereas Petromanas owns 25% of the shares and has operator status.
Debtors
Albpetrol has debtors in the extent of $ 88. 000.000 in which $ 79.000.000 obligations were created in last 10 years. Since October 2013 are signed agreements to liquidate with installments debts for more than 50 million USD. There are in pursuit judicial or administrative processes for the recovery of about 29 million USD.
For 2014
The Albpetrol JSC society revenues are projected to be 6,103,798,000 ALL (Albanian money)
The costs are projected to be 4,858,976,000 ALL
The profit is projected to be 1,244,822,000 ALL
Rentability 25.6%
The investments are forecast in figure 921.429.00 ALL
GEOLOGICAL RESERVES
According to calculations made by qualified specialists until the years 1985 – 1990, the initial geological oil reserves is estimated 437,645,143 tons of oil, 81,025,885 tons of oil of total are considered extracted reserves.
Until 01/01/2014 Albania produced 56 703 788.23 ton of oil, which means 68.49% of the extracted reserves or 12.68% the of geological reserves. Geological reserves of the gas, are estimated in total 18,163,700,000 Nm3 gas, and in 01/01/2013 are brought up a total of 12,503,725,787 Nm3 gas. Remain to be extracted 5.659.974.2013 Nm3gas.
The value of extracted reserves of 81,025,885 tons of oil, in terms of a quality improvement exploitation technology of wells and oilfields, particularly the last 20 years, reassessed “a priori” and thought to be 50-60% higher, which means that extracted reserves can be 110 to 120 million tons in total. Total of 2,764 billion Nm3 gas are extracted from field or 56.54%. Thus from extracted gas reserves have remained around 2,136 billion Nm3 gas layer.
| Geological reserves of gas estimated as safe are: |
|
| Natural gas (in sands deposits) |
4,913,700,000 Nm3 |
| Associated petroleum gas (in sands and limestone deposits) |
13,250,000,000 Nm3 |
| Total Sum |
18,163,700,000 Nm3 gas |
The maximum of oil production is realized in 1974 with 2.250.000 tones of oil/year (or 6165 ton of oil/day, equivalent to 38.712 barrels/day). The amount of gas, higher values, has been in 1982 with 940.000.000 Nm3 gas/year (or 2,575,342 Nm3gas/day).
In those years the number of employees in oil industry, which included about 34 companies, were about 25,000 people, of who about 2,800 employees were senior and middle specialists.
By the end of 2013, were discovered and were put into use 3 oil fields in the sandy layers and 9 oil deposits in the limestone. Also, during this period were discovered 4 natural gas deposits in sandy layers and 1 condensate gas field in the limestone layer.
Recently, the Shell and Petromanas societies have discovered a new oil field in limestone and they are continuing for fully outline.
NATURAL GAS
The gas exploitation for industrial use in Albania dates in 1963, a period when the extent of condensed gas in Bubullima (Kallm Zone) is put into operation. Later, in 1964 the natural gas reserve in Divjaka also have been put into operation, followed then with finding and using other natural gas sources: Frakull (1972), the Finiq-Krane (1974), Ballaj (1983), Povelça (1987), Panaja (1989) and Delvina (1989).
Historically, the natural gas has been an important element to the power supply of Albanian market, but currently its contribution is very low because of minimum production levels, while the import from the international pipeline lines currently is impossible due to lack of the Albanian gas network connectivity with gas network system in the international market. The studies achieved until now have as purpose the identifying of alternatives to link Albania with the European gas network.
The gas reserves have recorded a continuously decrease since 1985, reaching a minimum level in the early 90’, due to the lack of new discoveries and investments in the existing resources.
Until 1990, the natural gas extracted is used for chemical waste industry, oil industry, electricity production and a very small amount for the household sector. The gas extraction, management and development of gas reserves in Albania are made from state-owned society as Albpetrol JSC (the largest producer of crude oil in Albania). The daily production of gas is used by Albpetrol JSC and ARMO JSC, the only crude oil refinery that meet the technological requirements. In particular, the extracted gas is used as a main substance in “The Petroleum Processing Centre” (PPC) in Ballsh region.
Local network of the gas pipeline
Pipeline network is spread in all western part of Albania and ends in ORC (Binary plants, known also as ranking organic cycle) in Ballsh. The local infrastructure of gas network in Albania has a greater extent than the oil infrastructure.
Gas fields stretch from Durres (located in the center of Albania) to Delvina (in the south of the country), thus creating an opportunity for the consumers to connect with network.
The limited local gas infrastructure in some places is outside of operative condition and major rehabilitation works are needed.
Parts of the network are not able to transport the gas due to its corrosion and destruction.
According to forecasts, the existing of gas pipeline network will be completely replaced.
LEGISLATION
In Albania the activity of research, production, processing, transportation and marketing of oil, gas and their derivatives are regulated by two laws based on the hydrocarbon sector: Law no. 7746, no. 28.07.1993 “On Petroleum (exploration and production)”, which creates a flexible space and a greater security for foreign investors in the exploration and production hydrocarbon activity, and law no. 8450, no. 24.02.1999 “On the processing, transportation and marketing of oil, gas and their derivatives”.
The law “On Petroleum” recognizes the Albania sovereignty on hydrocarbon reserves, which are the property of the Albanian State. Contractor is given the exclusive right for a period not exceeding 25 years, to develop and produce hydrocarbon reserves in the contract area, in accordance with the terms of a Plan – Develop approved by the Ministry responsible for petroleum, as well as the rights to renew the contract in the extent provided in the Agreement License.
By adopting the two laws as above, Albpetrol JSC Company is given the administration of the existing oil and gas field in Albanian territory, and four search blocks for oil and gas as: Dumre, Panaja, Velçë and Delvina.
By the decision of the Council of Ministers No. 279, dated 04.12.2012 for approval of the facilities list of the hydrocarbon operations, part of the agreement signed in 26/07/1993, and Albanian government attached also other search blocks as: Blocks 1, 5, 6, 7, and 8.
As the result of the privatization failure, these blocks are state-owned that are in the administration of the Albpetrol JSC Company.
