Prime Minister Edi Rama: Good afternoon! We are back to go on with our joint work.

I am here today along with the Minister of Energy and Infrastructure to talk about a significant discovery that could have a major impact on the economic and social development, as well as on Albania’s geopolitical and geostrategic position.

As we briefly announced a day ago, we have already embarked on an advanced stage of an almost 10-year effort and are in the run-up to the final testing, which is necessary to appraise the pressure sustainability of the gas and oil flow that can be extracted from the underground. This means that the oil reserve has been discovered at 6002 m deep underground, after a very arduous exploration drilling of the area’s geological formation and a massive investment following the repeated breakage of probes due to the geological formation.

The most interesting news is that no water has been hit so far and water is supposed to lie underneath the oil reserve, which gives us a hint that the size of the deposit could presumably be even larger. We can currently speak about concrete figures and data, as it would be wrong to do so.

the information at this stage is not only confidential, but their confidentiality is related to what I already said that without obtaining the result of the final test that practically determines whether the extraction of this asset is reasonable and feasible from the financial point of view, because if the cost of this process would outweigh the profit, then it goes without saying the reserve is there, it will remain there for another time, when the technology can develop to a stage not accessible today, even though the company SHELL has employed the state-of-the-art technology and, in terms of entire technical aspect, what is being done in Shpirag employs the latest technology currently available in the global oil and gas extraction industry.

In parallel with the preparation for the test that will begin in October, the results of the test are based on monitoring the sustainability of the flow that comes out of the surface, which is normally conducted for a period of two to three months, the massive investment plan is in progress. After all that reserve that needs to be extracted, the process also includes the relevant infrastructure for shipping the gas and oil and delivery to the local and world market.

Another great news is that the oil is of the highest quality. This is the first time to happen in our country as the resources that have been discovered in the past and have been exploited and are still being exploited, like Patos-Marinza oil field for instance, are heavy oil deposits and as such is used for bitumen and solar only, but it can’t be used as fuel for vehicles and its value is modest. Tests conducted by the Dutch laboratory show that the oil discovered in the Shpirag field has the same premium quality as that of Saudi Arabia.

The project for the extraction of oil in Shpirag that will be implemented by the company “Shell” starts off with an investment of 3 billion euros and according to the projection until the completion of all the necessary infrastructure, such as the work for a series of drillings to develop the entire complex necessary to extract this wealth totals a 7 billion euro in our country. This investment entails the construction of the entire infrastructure and facilities for the reserve storage, for segregating oil, gas and sulphur and the third is particularly important as it would create the basis either for the production of agricultural inputs or for cosmetic products, something that Albania can make use of to build a new industrial component we currently lack.

It is also worth saying today that for around a year now work is underway on establishment of Albania’s Sovereign Wealth Fund. Nations rich in such natural resources have established their sovereign wealth funds to balance use of the reserve and preserve oil and gas revenues for the future generations.

We have launched a concrete work process to consult with Norway’s oil fund, also known as Government Pension Fund, and our sovereign fund will definitely have a profile that will integrate the indispensability to support retired people and balance the whole terrible burden we inherit from the past with the ethical principle that this wealth belongs both to those who lived and worked in this country, as well as to those who were born and will be born here who will have their share in this.

The sovereign fund is an investment fund that may decide to multiply its revenues by accessing the international market too and we are in parallel working with the Center for International Development at Harvard University and, in the meantime, we have employed all our contacts with other wealth funds of the Saudi Arabia, Azerbaijan, the Saudi Emirates and so on and so forth.

This is, as I already said, a great and long-awaited development, but it is not the only one, as exploration drills are also underway in the Dumre oilfield, where another global energy leader in exploitation of the underground natural resources, Italian company ENI is operating. Optimistic and encouraging data have been established there too, yet work is still on an initial stage, as the company launched its operation prior to the pandemic that actually blocked the process.

I would like to conclude this part by citing something as I think it is very important to repeat.

Unfortunately, due to mismanagement, government misconduct, big misunderstanding and abuse of our natural resources – we all know and let’s not go back to the stories about AlbPetrol, Patos Marinza oilfield and all kinds of obscure connections – but the word fuel and oil, in the mind of the citizens, has become a synonym of theft. The truth is that, on the one hand, we have not had – and we all must understand this very well – it is not that our country hasn’t had any extraordinary wealth available so far, so the resources used over the years have been modest, misused resources. Indeed, the concession contracts signed in the past have been scandalous as they were practically a total surrender of sovereignty and the right of the people to take their own share in this wealth from all sorts of contracts, but this wealth has been misused too.

What I would like to say is that we have been fighting such a legacy as much as we could finding ourselves in circumstances with contracts that could not be adjusted, but we have completely altered that state’s approach to such contracts about explorations of the country’s natural resources and we have established contractual relations with leading international companies, including SHELL or ENI.

That being said, everyone in Albania today, every Albanian should be confident that this great wealth will be their wealth and will be a support for everyone. I mean the economic and financial benefit from this national wealth will impact pensions, the balance of payments of the Republic of Albania, the education system, the health system and it will impact primary the well-being of our children, as they will be the main beneficiaries if we will be able to build properly and we will know how to build it properly, because we are not doing it on our own, a sovereign wealth fund, a serious fund with a great responsibility for protection and strengthening the country’s economic sovereignty.

/u.sh/

Work activity is currently concentrated on appraisal drilling at the Shpirag- 5 well, part of the Appraisal Programme of the Block 2/3. A geological survey has shown that it is one of the most difficult and most challenging oilfields in the world.

Prime Minister Edi Rama, accompanied by the Deputy Prime Minister Belinda Balluku – also Minister of Infrastructure and Energy – Shell Albania executives and project managers at Shpirag4 and Shpirag-5 wells, inspected progress of the exploration work on the oilfield Shpirag-5, where drilling stage has successfully completed.

Prime Minister Rama was briefed in details by the company executives and field experts on the progress of the work to date, where the significant discovery at a depth of 6.1 km in the petroleum -bearing soil, carries with it the great promise of extracting a significant wealth for Albania and the Albanians, and the challenge of the final technical test of the stability appraisal of the pressure of the gas and oil flow to the surface.

/u.sh/