How Albanian legislation facilitates the exploration and development of hydrocarbo

Presentation: How Albanian legislation facilitates the exploration and development of

hydrocarbons

Dael Dervishi, Executive Director, National Agency of Natural Resources (AKBN)

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HOW ALBANIAN LEGISLATION FACILITATES ON EXPLORATION DEVELOPMENT OF HYDROCARBONS Dael DERVISHI Executive Director National Agency of Natural Resources

• Free exploration blocks;

• The sedimentary basins detecting oil and gas;

• Biggest reserve onshore in Europe (Patos-Marinza field);

• The discovery of Shpiragu oil resource.

MARINZA

VISOKA

BALLSHI

CAKRANI

GORISHTI

AMONICA

Status of Existing Oil Fields

Managed from Albpetrol;

AKBN licensing authority;

Albetrol and Private Partnership;

PEP and ASP;

Patos – Marinza;

Governments target to privatize Albpetrol.

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Status of Exploration Blocks

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Licensed Blocks;

Free blocks;

Blocks under process of agreement termination;

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• Shell and Petromanas Energy Inc announced that their first drilled well Shpiragu 2 resulted with flow rates of more than 1,500 barrels per day of oil with 35 to 37 degree API oil and more than 70.000 cubic meter/day of gas observed during the test period. • The cost of the 5,553 meters exploration well reached $75 million.

• Shell 75% and PMI 25%.

• Greatest Oil discovery in the last 20 years.

• Molisht 1 and Shpiragu 3, 4.

SHPIRAGU DISCOVERY

Shpiragu- 2 well

6 Shpirag structure

Geological Reserves for Shpiragu: 233 mm boe; Geological Reserves for Molisht: 142 mm boe

Geological Structure Shpirag

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• Albania is located on the Eastern side of the Adriatic Sea in

Southeast Europe and has significant natural resources that include

oil and gas.

• The Ionian and South Adriatic basins are located predominantly

in Western part of Albania.

• The South Adriatic Basin in this part of it remains one of

minimally explored offshore hydrocarbon area.

• Given the fact that the bulk of the basins are not enough

explored, the potential for large hydrocarbon reserves as exist in

the similar type of basins around the world would appear to be an

excellent possibility.

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• Reprocessed seismic data since 1990, recent

concepts in seismic stratigraphy and the analysis and

interpretation of multiple data bases from several previous

operators allowed for positive revisions to the geological

model and hydrocarbon assessment of the Ionian and

South Adriatic Basin.

• The revisions confirmed that important aspects which

are indicators of potential commercial hydrocarbons are

present.

• The result of the new discovery within blocks 2&3

shows the petroleum potential of the sedimentary basins

in the Albanian territory.

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• Albania is situated in the middle of the Helenid-Dinarid chain.

• Albania fold belt is separated from the Italian Apennine fold belt by the Adriatic foredeep basin.

APENNINE ADRIATIC FOREDEEP BASIN ALBANIDES

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• Ionian basin is represented by the pelagic limestone outcropping in South part of our country, able to generate oil and gas. • Giant oil fields were discovered in Mesozoic carbonate traps, and a variety of gas fields in Tertiary reservoirs in the Mollase deposits as parts of the South Adriatic Basin.

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• Albania is considered as a Hydrocarbon bearing province. • Many oil field and gas field have been discovered with the time. • Oil field are related with Ionian basin while gas fields are discovered in both Ionian and Adriatic. •The main oil field is Patos Marinza in sandstone reservoir in the Middle part of the country.

HYDROCARBON OCCURRENCES & PRODUCTION ONSHORE OIL AND GAS FIELDS

Marinza Shpiragu

Marinza oil field

Shpiragu

discovery

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Top Miocene TWT map, showing location of Vjosa Alban South, and Semani Prospects.

Durres Tortonian-Serravaliant urbidites Ballaj Pliocene turbidites, 14.5bcfAlban Alban Divjaka Upper TortonianDeltaic Sst, 8.4km2, UR 51bcf Pliocene turbidites, UR 16bcf Povelca Messinian–TortonianTurbidites, 27km2, UR 8.8bcf Frakulla MessinianDeltaic Ssts, 28km2, UR 9.2bcf

GAS FIELD ONSHORE & PROSPECTS OFFSHORE

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OIL PRODUCTION

As the result of the foreign investments the oil production is increased.

In 2014 the production reached 1 250 000 tons.

OFFSHORE AND ONSHORE

SEISMIC ACQUISITION

• In the offshore blocks 11.124

km of 2D seismic profiles &

1.400 square km were

acquired and 6 exploration

wells were drilled with an

overall footage of 21.629m.

•In the onshore 3000 km

seismic 2D and 6 exploration

wells have been drilled.

• As a result of these

investments certain leads

have been prognosed and tow

oil and gas discoveries have

been declared in onshore and

offshore

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LEGISLATION ON PETROLEUM ACTIVITYLEGISLATION ACTIVITY

There are three principal laws related to petroleum exploration and/or production in Albania: The Law “On petroleum petroleum” (exploration and production), No.7746, date 28.07.1993; The Law “On the fiscal system on petroleum sector sector”, No. 7811, date 12.04.1994; • The Law “On national taxes”, No.9975, date , 28.07.2008.

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LICENSING PROCEDURES FOR PETROLEUM EXPLORATION IN FREE AREAS Presentation of an application for: Evaluating Permit or Petroleum Agreement. • Approval of the application; •Negotiation related to Main Terms and Conditions of the Petroleum Agreement; • Approval of Main Terms and Conditions of the Petroleum Agreement;

•Negotiation of the Petroleum Agreement; •Signature of the Petroleum Agreement; •Approval of the Petroleum Agreement.

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DATA ACCESS According to the rules, exploration data are the property of the State. These data are available to the representatives of a legal person who is registered and approved by the Ministry or NANR, as Data Room user. All available data on oil and gas exploration in Albania, including formerly acquired 2D/3D seismic reflective profiles and drilled wells logs, are accessible. The database contains all collected, processed and interpreted information about oil and gas exploration, on offshore and onshore of Albania.

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The database of seismic, geological, geophysical, geochemical and other data on oil and gas exploration is complex and comprises: 2D processed seismic reflective profiles in SEGY format and 2D filed data (raw shots) in SEGD format, acquired during previous years - 1979, 1983, 1984, 1985, 1986, 1988. , as well as numerous well data with logs. Numerous reports and studies on conducted investigations, with results of data processing and interpretation in analogue and digital form, are part of the available data. Data Room includes special depot with physical drilling core samples of deep exploration wells, on offshore and onshore of Albania.

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ALBANIA – ATTRACTIVE COUNTRY FOR INVESTMENTS GOVERNMENT GOVERNMENT’S REFORMS: • Simplification of licensing procedures –National Licensing Center, Regulatory Reform on Business Climate; • Reorganization of the inspection system; • Reforms of the fiscal and procurements systems • New Law on Concessions (PPP) – compliant with EU directives and regulations; • Successful implementation of the Interim Agreement of Trade with EU; • CEFTA – Free access to regional market; • Reform for the reduction of the informal economy; • Regulation of banking sector, adopting EU directives and legislation

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Albania Based on the geological studies, carried out in the past by Albpetrol (Albanian state company) and those (performed in the recent years by the foreign companies, it appears that Albania, in spite of the existing oil and gas fields, still has a very good potential and is very promising area for further exploration in both onshore and offshore. The recoverable potential in the Albania territory has been estimated at more than 30 Tcf of gas and hundreds mmboe. Several factors render the Albania attractive for hydrocarbon exploration and development. These include larger and growing markets for hydrocarbon products both domestic and for export.

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The National Agency of Natural Resources is vested with the

authority to monitor and regulate the Albanian oil and gas

industry.

The NANR oversees all the activities of all the companies

licensed to engage in exploration and production petroleum

activity in the country to ensure compliance with the terms

and regulations relating to the conditions of the license.

The NANR over the years has helped in creating conducive

business environment for investors in this sector hence the

tremendous continuous growth.

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THANK YOU !