This is the Albania EITI 2018 Annual Progress Report (in accordance with Requirements 7.4 and 8.4).
Rich in natural resources, Albania is using the EITI to modernise and promote good governance of the extractive industries. As of 2016, the energy sector contributes 6% of GDP with USD 805 million government revenues. Its energy sector includes hydrocarbons (crude oil, natural gas, solid fuels), hydropower and renewable energy systems (RES), with crude oil being its primary source. The mining sector is represented by mostly chromium and limestone contributing 55% and 31% to the domestic mining output respectively. At the same time, Albania is the only EITI implementing country to expand its EITI scope to hydropower.
While Albania’s extractive sector was previously dominated by state-owned enterprises, in 1994 it opened up to private investment. The Albanian government is working to promote investment in its energy sector to stimulate development and job creation.
The energy sector is regulated by separate laws and provisions. The Ministry of Energy and Industry (MEI) is responsible for granting exploration and production licenses in the mining sector, and evaluating applications for petroleum production sharing agreements (PSAs) and concession rights for the hydropower sector. The government receives most of its revenues through a share of production, as well as through bonuses, royalties, profit taxes and from direct investments in the sector. Revenues such as service tariffs and license fees are collected through the State Treasury System (Ministry of Finance). Albpetrol, the country’s third largest state-owned enterprise, collects a share of oil production and bonuses.
The petroleum industry has two main systems for awarding contracts: competitive bidding and ad hoc negotiations. The Ministry of Energy and Industry grants mining licenses and hydropower concessions. State-owned Albpetrol may sub-contract its exploration and production rights to oil and gas companies through petroleum agreements, approved by MEI.
In 2016, the oil and gas sector counted seven companies extracting crude oil in the southern part of Albania and four companies engaged in exploration activities. In 2016, Albpetrol reported domestic crude oil production at 1,034 thousand tons with an estimated worth of USD 179.3 million based on average export prices in 2016. The biggest operating oilfield is Patos-Marinza, which represents 87% of total crude oil production. Crude oil is mainly exported to Italy, Spain and Malta.
Domestic mining output was estimated at USD 214.1 million in 2016 (including the value added through mineral processing). Chromium contributed the largest share with about 74% of domestic mining output value. Limestone and other construction minerals represented the second largest group of minerals after chromium, with 22% of the domestic mining output value.
Source: Albania’s 2013-2014 EITI Report.
|Hydro power||10,000||GWh||Annual potential capacity of hydropower production|
Albpetrol sells the oil received from PSAs (profit share) and extracted through its own oil field operations (equity oil) through open public auctions. The auctions allocate annual contracts to sell oil, and the quantity of oil to be sold under the contract is based on the annual forecasts of oil to be received in-kind by Albpetrol. Albpetrol delivers oil and collects payments from the company contracted to sell the oil in accordance with a pre-defined annual schedule.
Albania’s 2015 EITI Report, published in March 2017, disclosed new information on how the country’s commodity trading industry works. In 2016, Albania signaled its interest to participate in the EITI’s targeted efforts on commodity trading. The country has also produced its commodity trading report in 2018.
A share of oil and bonuses are collected by the state-owned enterprises Albpetrol and AKBN, whereas a royalty tax, profit tax, dividends and other payments are collected by the government. The government’s revenues from extractive industries and hydropower sector amounted to USD 805 million in 2016, which comprises about 5% of total revenue recorded in the State budget.
Royalties levied from taxable sales of oil, gas, and minerals is recorded in the state budget. According to the “Law on National taxes no. 9975, dated 28 July 2008, amended,” 5% of royalty tax collected must be allocated to each local government unit (“LGU”), proportionate to their contribution to the domestic output of oil, gas and mining.
According to the 2016 EITI Report, subnational transfers amounted to USD 3.5 million in 2016 and represents the main revenue allocated to the local governments.
The EITI encourages multi-stakeholder groups to explore innovative approaches to make the EITI more relevant and useful.
Commodity trading is covered in the 2015 EITI Report and in a standalone 2018 Commodity Trading Report.
- Hydropower is included in EITI reporting makes Albania so far the only EITI implementing country covering hydropower sector.
Mining companies are required to implement the EITI, according to Law 10304. The Presidential Order No. 71 (dated 21 July 2011) establishes the EITI structures and process that must be followed. As of March 2015, oil companies are required to participate in the EITI, according to an amended legislation on hydrocarbons, Law 7746 from 28 July 1993.
Albania is using the EITI process for wider reforms in the sector, including the development of a revenue management plan to address informality in the mining sector and building its capacity in contracts.
In February 2018, the EITI Board agreed that Albania has made meaningful progress in implementing the 2016 EITI Standard. In the second Validation, the EITI International Secretariat assessed the progress made in addressing the ten corrective actions established by the EITI Board following the first Validation. On 17 June 2019, the Board decided that Albania made meaningful progress with considerable improvements. The third validation of Albania will commence on 17 June 2020. The MSG has to address six corrective actions.
In February 2018, the EITI Board agreed that Albania has made meaningful progress in implementing the 2016 EITI Standard. See Board decision on the first Validation 2018-11/BM-39/BP-39-5-A
In the second Validation, the EITI International Secretariat has assessed the progress made in addressing the ten corrective actions established by the EITI Board following the first Validation. See more under background below. Board decision 2019-44/BM-43 can be found here
Timeline of Validation and related materials
This EITI Report covers Albania's extractive sector in 2016. It was published in August 2018.
This is the Albania EITI 2017 Annual Progress Report (in accordance with Requirements 7.4 and 8.4).
This is the Albania EITI 2016-2019 work plan (in accordance with Requirement 1.5).
On 13 February 2018, Albania was found to have made meaningful progress in implementing the EITI Standard. See Board decision 2018-11/BM-39
Timeline of Validation and related materials
Initial data collection and stakeholder consultations
This EITI Report covers Albania's extractive sector in 2015. It was published in December 2016.
This EITI Report covers Albania's extractive sector in 2013 and 2014. It was published in December 2015.
This EITI Report covers Albania's extractive sector in 2012. It was published in November 2014.
This is the Albania EITI 2014 Annual Progress Report (in accordance with Requirements 7.4 and 8.4).
This Albania EITI Validation report was published in August 2011.