Oil production substantially increase the exports

A recent article in the renowned magazine Oil Price asked “Can Oil Pull Greece Out Of Poverty?”. The obvious thought that rise up in mind is a parallel with already huge amount reserves available and exploited in Albania. According to data published by state-run statistical institute, INSTAT, Albania’s exports officially grew by double digits in the first half of this year.

In spite of the influence in this result that came from the bankruptcy of the only local refining industry to the ownership of the Armo company, the fact is that the hydrocarbon sector is very important for Albania. On regard, an important part of exports growth is a result of a sharp hike in crude oil production following the late 2017. Thus, after the 1990s, well-known foreign companies showed interest in investing in the oil sector in Albania through concession agreements with the government and state company Albpetrol, engaged in the development, production and trade-off crude oil and gas.

The largest company of oil exports is Bankers Petroleum Albania, which exploits Patos-Marinez field. Patos Marinza is considered the actual largest onshore oil in the whole of Europe. According to official sources, the area of 44 thousand hectares is estimate with a production capacity of 7.7 million barrels of oil per year. However, the National Agency of Natural Resources, estimate that million tons of oil are still unexploited in many parts of the country.

As a result of expansion of foreign investment, oil exports have been growing very rapidly from 2005. Oil exports to foreign markets at the end of 2012 compared to 2005 have recorded an increase of 2,880%. The same positive trend have continue on following years due to reaching 2015 record of crude oil production at 1,279,136 ton. An important amount of exports for a small country but still well behind the highest pick in 1974 with an annual production of 2.25 million tons).

Moreover, towards the launch of the oil industry, a good news is expected by the end of this year related to the Block 4 of Shpirag, Berat. Promising reserves which could boost the entire oil industry of Albania and the much needed foreign direct investment at the moment. "If the evaluation program is successful, we can talk about a development that could lead to the recovery of several hundred million reserves of oil" says in a recent interview Jan-Henk van Konijnenburg, CEO of Shell Upstream Albania. Volumes that would be relevant for Shell, but particularly important for Albania and also for the entire region.

The oil and gas industry is a strong engine for any industrialization. So, closing with an answer to the beginning dilemma, despite the transformation to the entire sector, with a new contemporary legal framework already implemented in the last year, many challenges still remain ahead, like the work to be done to create new infrastructure, modernize the existing refinery of the ARMO, complete the reform of "Albpetrol", guarantee the diversification of the supply, fullfil the requirement taken by participation in the regional initiative and create a balance sustainability development of the entire energy sector.

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