March 17, 2015 / 1:48 PM / 2 years ago

Albania to sell state oil firm, offer oil blocks

3 Min Read

* Albania to sell state oil firm this year-PM

* Investors will be offered new exploration blocks

* Albania says has 40 million tonnes of easily extractable oil

By Benet Koleka

TIRANA, March 17 (Reuters) - Albania wants to try again to privatise its state oil company this year, and will soon begin offering its blocks for oil and gas exploration, Prime Minister Edi Rama said on Tuesday.

The previous Democratic Party government, which Rama's Socialist-led coalition ousted in June 2013, cancelled the sale two years ago to a private buyer.

"We will end the long-drawn process of the privatisation of the state-owned Albpetrol company this year," Rama said.

"Since the very first day, it was clear to us Albpetrol was an anachronism and a hybrid that could not meet the challenges of the future," he told oil executives.

His audience included representatives of Shell, already active in Albania, Exxon Mobil, BP, Italy's Eni , Austria's OMV and Croatia's INA.

Albpetrol is an upstream company only, having sold its oil refinery four years ago.

Wooing investors, Rama said the government was determined to "secure a favourable regime for the exploration and development of oil and gas", including stabilizing fiscal clauses for the duration of contracts.

Oil and gas reserves are estimated to amount to 400 million tonnes, of which 40 million are easily extractable, Energy Minister Damian Gjiknuri said.

Thirteen onshore and offshore blocks can be explored for oil and gas, Rama and Gjiknuri said. "Very soon we shall start procedures to give the first three blocks for exploration to interested companies," Gjiknuri said.

Albanian law offered attractive fiscal terms during the exploration period, exempting companies from paying Value Added Tax, extending the research period from 5 to 7 years and the production time from 25 to 30 years, Gjiknuri said.

Shell and Calgary, Canada-based Petromanas Energy Inc already operate a well offshore Albania and have said test flows found oil and gas, but are yet to establish its production capacity.

The well is across the Adriatic Sea from Italy's offshore Val d'Agri field which pumps around 85,000 barrels per day. (Editing by William Hardy)

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