INFORMATION ON THE ACTUAL STATE OF HYDROCARBON AGREEMENTS

One of the important activities of the Directorate of Hydrocarbons is the monitoring of the implementation of the Hydrocarbon Agreements for the exploration of oil and gas onshore and offshore.

There are currently two Hydrocarbon Agreements, or Production Sharing Contracts (PSCs), for the Exploration, Development and Production of Hydrocarbons in oil and gas exploration blocks in Albania:

• Agreement on Block 2-3, onshore with the company Shell Upstream Albania;
• The agreement on Block 4, onshore, also with Shell Upstream Albania.

Three Hydrocarbon Agreements are almost being concluded:

1- Agreement on Block Joni-5, offshore with Capricorn Albania (Cairn Energy);

2- Agreement on Blocks 2, 3 and 4, offshore with Emanuelle Adriatic Energy Limited;

3- Agreement on Durrës Block, offshore;

Below there are some summarized data on the active agreements:

1- Agreement on blocks 2- 3 onshore

The agreement on Blocks 2-3 has been approved by the Council of Ministers, with decision no. 754 of 08.07.2009 and published in the Official Gazette No. 116 of 31.07.2009. The participation interests in this contract are 100% of Royal Dutch Shell. The operator is Shell Upstream Albania.

The company has completed the first two phases of exploration and declared on November 4, 2013 that it has carried out oil exploration. Positive results were announced after the test performed on the Shpirag-2 well. These results confirmed that the Shpirag-2 well produces oil and gas at the level of 1,500 to 2,200 bbls / day. The oil is of good quality, so it is light (350 to 370 API) and the H2S content (5,000 ppm), lower than expected. This discovery materialized the great efforts of companies that have operated for years in Albania and at the same time it opened a real perspective for further exploration.

Under this agreement, the Shell Company has presented an Evaluation Plan which aims to prove the commerciality of the Shpiragu-2 well. The Evaluation Plan aims to determine:

Oil supply;

Reservoir size;

Economic stability of the project;

As part of the Assessment Phase, the Shpiragu-4 Assessment Well is being drilled. In Molishti-1 and Shpiragu-3 wells, for technical reasons, drilling operations have been temporarily suspended, to be recovered later, to fulfill the necessary geological tasks.

The company has realized 550 km of 2D seismic works, has performed reprocessing of 150 km of the existing 2D seismic, as well as has performed passive seismic works in blocks 2 and 3.

In addition to drilling Shpiragu-4 well, during 2018 the company will carry out 90 km of new 2D seismic works, in the northern part of the Shpiragu structure, to place the drilling of new wells in the future.

2- Agreement for block 4 onshore

After the negotiations held for quite a long, AKBN concluded the agreement with the company Shell Upstream Albania for Block 4 onshore. The agreement was signed by the parties and forwarded to the Council of Ministers for approval.