Presentation: Albpetrol status update in the era of privatisation

Endri Puka, Chairman, Albpetrol

Albpetrol Status Update Before Privatisation

www.albpetrol.al

Abstract

Albpetrol is a joint stock company, with 100% of the shares owned by Government of Albania.

Albpetrol is a key player in Albania for oil, gas production and trading.

Albpetrol holds the TSO and DSO exclusive licenses for transportation and distribution of natural gas in the country.

Assets

Capital

Employees

Income

Profit

Oil production in Albania 1929-2014

TECTONIC MAP OF ALBANIA

OIL FIELDS & ONSHORE

EXPLORATION BLOCKS

Production 2014 (ton)

Albpetrol, 45,384 Bankers Petroleum, 1,214,138

Stream Oil and Gas, 81,164

Transoil Group, 23,563

Sherwood, 188

Phoenix, 5,072 Other, 5,260

Oil Fields

Albanian territory has 19 known Oil Fields

Albpetrol has partnership agreements with IOC-s for 16 oil fields

The agreement signed by Albpetrol and approved by GA are PSA agreements

Petroleum Agreements

The Petroleum Agreements signed by Albpetrol have been successful regarding oil production.

GA is taking a 10% royalty tax from the production.

GA must take 50% of the profit

Albpetrol Supervising Role

During the last two years Albpetrol has intensified the monitoring process and as result we have now a significant reduction of operative costs from our partner companies.

In 2015 Albanian Government expects to begin receiving for the first time profit from PSA agreements.

Privatization Process

In 2015 GA has started the process for Albpetrol privatization

The new privatization foresees that Albpetrol will not manage anymore the free blocks for explorations. These blocks will remain under the Albanian Government management after the privatization.

Also the TSO license will remain under GA control

The strategy consist in establishing a new company, which will manage the license for transportation of natural gas in the country.

Natural Gas Market Development

Albanian natural gas market is underdeveloped at this stage because of no feasible sources of gas.

Even that in the past industrial consumers has been the main drive for this market, at this stage most of the customers are SME-s and family customers.

The lack of the gas sources has led to lower interest in investing for the development of any large scale gas network.

The Albanian Gas Master Plan

The Gas Master Plan may open some windows of opportunities in developing the Albanian Natural Gas Market.

Identified opportunities will attract interest and new investment to develop the market.

Albpetrol will be actively involved for successfully developing this Gas Master Plan.

TAP a Potential Gas Source

TAP plans to build a capacity of a maximum of 20 bcma, connecting Turkey with southern Italy.

Of which, 10 bcma are already booked and planed to be operational from January 2020.

Albpetrol has a pending application with TAP to book a capacity of 1.2 bcma.

Dumrea Area

The salt dome of Dumrea is a large diapir covering a surface area of approximately 250 km².

The salt mirror is mostly at depth 2,000 m.

In the upper part, the evaporate depositions are covered by the cap rock of a thickness of 0-300 m, while the maximum depth of the salt floor is expected to be 6,000 m.

The salt volume is estimated to amount 1,400 km³.

TOPOGRAPHIC MAP OF DUMREA REGION

GEOLOGICAL MAP OF DUMREA

REGION

REGIONAL MAP OF DUMREA EVAPORITIC MASSIVE

Dumrea Underground Gas Storage

Options:

Storage capacities for Albanian market consumption and security of supply.

Storage capacities for international market consumption and security of supply

Feasibility study for working capacity of 1.2 bcm, with withdrawal rate of 6 mcm/day, already in progress by Albpetrol.

Dumrea Underground Gas Storage

UNDERGROUND GAS STORAGE IN DUMREA

Dumrea UGS, Business Opportunities

Low investment profile as Dumrea UGS, will be developed as “salt cavern” UGS.

Dumrea UGS may serve as a buffer capacity to TAP, and possible IAP, pipelines

In the near future, our neighbors such as Monte Negro, Kosovo and Macedonia may require natural gas storage capacities for security of supply.

thank you