Use of the Albanian crude oil
Oil produced in the country is mostly exported to be refined abroad1.. Internal consumption for refined oil is fulfilled through imported oil. Based on the data reported by the Albanian Customs Directorate (table), oil exports accounted for 104% of oil produced in 2013. This ratio decreased to 77% of oil produced in 2014, when crude oil refined through domestic refineries reached 22%.
Crude oil dependency
Domestic crude oil produced represented 76% of internal demands oil in 2011. Following to increased activity of private licensees in the sector, crude oil production increased steadily at a compound annual rate of 12% up to the end of 2014. In 2013, the crude oil produced approximated the internal consumption of crude oil at 98% and exceeded by 108% internal demand for crude oil in 2014. Based on these data, can be assumed that had total crude oil output been refined in Albania, the country output would have been very close to fulfilling internal consumption demand.
Exports of crude oil
Exports of crude oil amounted respectively at Lek 69.5 billion and Lek 55 billion and comprised 28% and 22% of total exports in 2013 and 2014. Exports of oil steadily increased at a compound annual rate of 30% from 2011 to 2013, than dropped by 20% in 2014 due to increased domestic refining activity.
During the last four years, petroleum was exported mainly to the Western Europe countries, where Italy appears to be the major importer of oil, followed by Spain and Malta.
ARMO Sh.a. (“ARMO”) is the only oil refining company operating in Albania established as a spin off from the State-owned oil company Albpetrol Sh.a. in April 1999. In August 2008, the Albanian Government privatized 85% of the shares in ARMO to Anika Mercuria Refinery Associated Oil (“AMRA Oil”). In August 2013, Heaney Asset Corporation purchased 80% shares of AMRA Oil controlling 68% interest in ARMO.
Up to May 2014, ARMO operated the two oil refineries in Ballsh and Fier, three wholesale branches, a research facility, and an import/export terminal with a total storage capacity of 220,000 cubic meters. The refineries were built in early 70s with technology which dates back in the 60s. The facilities have both a refining capacity of 1.5 million tons per year, however work at substantially low capacity due to outdated technology. Ballsh is the only complex refinery in the country equipped to produce different oil by-products. In 2013 and 2014, ARMO employed about 1,500 staff.
According to public information, ARMO has interrupted its operations in Ballsh refinery Since June 2015. While TPD Trading Petrol & Drilling Sh.a. (TPD) continues to operate the oil refinery of Fier since 2013 via a cooperation agreement with ARMO.
Two crude oil pipelines connect the ARMO Vlora oil terminal with the refineries of Fier and Ballsh and the two refineries. Both pipelines are out of operation due to poor condition. In total, the oil pipeline network is 188 km long and has a capacity of 2.5 million tons per year.
Currently, crude oil is mostly transported via oil tanks, from oil fields to Port of Vlora, from where exported to Italy, Spain, Malta, etc.
La Petrolifera Italo-Albanese Sh.a. operates the costal terminal for oil, LPG and their derivatives in the port of Vlora serving the upstream oil and gas companies with the deposit of crude oil to be exported. There are no State-owned companies operating in this sector.
Other Gas and oil depositing structures
Oil and gas fields where all or part of recoverable reserves have been extracted, can be used as the storage site for the storage of natural gas because of suitable geological conditions. Saline in Dumre are also very suitable for storing natural gas during summer. These geological advantages combined with geopolitical position make Albania an attractive route for regional gas pipeline projects.
1. Custom Authority shared with us for the purpose of this report exports of crude oil in the period 2011-2014.
2. This is a measure in terms of crude oil and includes refined oil internally consumed and crude oil refined in Albania.
3. Source: http://www.energjia.gov.al/al/publikime/nafta/perpunimi-i-naftes