Energy’s increasing importance in Albania

Extractive sector reform gains more traction as oil and gas industry grows.

Albania has released its 2012 EITI Report, its second under the EITI Standard and its second in the past six months.

With the two EITI reports published this year, the Albanian government has taken forward an ambitious reform programme related to the sector, including a revenue management plan, building capacity in contract negotiation, tackling informality in the mining sector and reporting requirements in legislation.

Albania’s Minister for Energy and Industry Gjiknuri put it succinctly, “We must forever close the book on the past. There is no turning back. It is high time that Albanians start obtaining the benefits from their resources. We will fight with determination every plague in the system. We must leave this clean to our future generations.”

Vice Minister of Energy and Industry Bejtja added “Our priority is simple: full transparency and accountability in the extractive industry and in the use of our resources. No doubt this sector carries big issues; especially mining. We are working with dedication for a new vision and a new standard, to restore confidence, to create an efficient comprehensive and transparent system.”

Upward trajectory in the extractives sector

Albania’s extractives sector continues to grow, as the newly released Report shows, covering 2012. The sector’s contribution to GDP increased to 5.6%, up from 4.3% in 2011, and significantly up from 2.4% in 2008. The industry’s contribution to the State Budget was also up from 1.8% to 2.5%.

The majority of the upward movement in the extractive sector is in oil and gas, increasing its share from 68% to 76% year on year. The Canadian company Bankers Petroleum, operating onshore in the region of Patos-Marinza, was responsible for 86% of Albania’s oil production, with production over 20,000 barrels per day.

Albania’s oil consumption has markedly decreased between 2008 and 2012 from 1.3 million tonnes to 1.0 million tonnes. During the same time period, the production of crude oil nearly doubled, from 578,000 tonnes to over a million tonnes, and exports almost quadrupled from 277,000 tonnes to over a million tonnes.

The total number of licensees selected for the reconciliation process was 78, comprising eight oil companies, state-owned company Albpetrol, and 69 mining companies.

In the mining sector, chromium continues to play a leading role at over 60% of mining production, with China and Switzerland the two main markets.

Mapping the industry

Published under the EITI Standard, Albania’s 2012 EITI Report contains significant sector information, including maps, charts, graphs and additional information about State-Owned Enterprise Albpetrol, allowing Albania’s citizens to more fully understand the sector.

Ilir Aliaj of the Center for Development of Democratisation of Institutions and a member of the multistakeholder group said, “Based on civil society’s request, we are pleased that further information on Albpetrol has been included, which demonstrates its commitment to implement the new EITI Standard."

The Report saw the participation and cooperation from the Ministry of Energy and Industry, the Ministry of Finance, the General Tax Directorate, the General Customs Directorate, the National Natural Resource Agency and the Geological Committee (SHGJSH).

Ms. Dorina Cinari, EITI Albania’s National Coordinator said, “With this most recent report, we are seeing a critical mass of information about our energy sector. It is painting a picture about what the extractive industries could look like in Albania. The increasing economic importance is visible and it is becoming increasingly politically important. You see that energy throughout the government’s agenda.”

 

View the TV interview with Dorina Cinari on the extractives (in Albanian)

For further information about the EITI in Albania, please visit the country page on the EITI website and the national EITI website.