COMMODITY TRADING REPORT CLICK HERE
RECOMMENDATIONS TO ALBPETROL
Albpetrol, as a State-owned entity has a crucial role in commodity trading transparency, because of its mandate to administer all the current oilfields in production stage. Albpetrol derives crude oil either through operating oilfields on its own or through sub-licensing its rights to the private oil companies, and sells crude oil via public auctions organized once or twice per year.
In order to enhance transparency and in line with EITI recent developments on disclosure of “first trades of oil”, Albpetrol shall maintain and annually disclose the following:
1. Full terms of the sales contracts
Albpetrol shall disclose the full terms of its contracts to sell crude oil in its website for public access. We understand that there should be no barriers to such disclosure because:
- The general terms of the contract are already public as it is based on the order no. 83, dated 10 February 2012 issued by the Minister responsible for the energy sector, as amended;
- The main commercial terms including selling price and quantity are already disclosed in Albpetrol’s website and EITI annual reports; and
- The contract articles do not restrict disclosure.
2. Factors considered in pricing oil sales
The results of the auctions organized by Albpetrol from year 2013 to 2016 show a limited number of bidders or sole bidder submitting a price, which is substantially the same as the auction floor price.
Given the situation, the contract assignment process is similar to a sole contractor negotiation, regardless its form as a public auction.
In order to enhance transparency over the contract price, Albpetrol shall perform periodical comparisons of the prices applied to those applied by the private oil companies in Albania. The following table provided an illustrative example of price comparisons and may be adapted as necessary to improve the comprehensiveness of comparisons.
|Average sales price applied in USD by
|Albpetrol’s average price not adjusted for freight & insurance costs(FOB)
|Albpetrol’s average adjusted for freight & insurance costs(EXW)
|Average prices applied by private companies(FoB)
|Average prices applied by private companies(EXW)
|Comments relevant to the price comparisons
3. Register of sales
In line with new EITI disclosure requirements on first sales of oil, Albpetrol shall maintain and disclose at least annually updated records of sales including details about quality sold, price applied for each contractor etc. Based on our understanding of Albpetrol’s sales terms, the sales register shall include at least the following information:
|Sales invoice #
|Contract number & date
|Quantity soldin ton
|Quantity soldin bbl
|Oil density in 15.5˚C
|Oil grade API
|Price formula with reference to Brent
|Price applied in USD
|Brent price used as reference
|Brent price reference date
|Payment options (pre-paid / post- paid)
In addition to the information listed above, Albpetrol shall start collecting information on the buyers’ beneficial owners. In line with EITI initiative on beneficial ownership disclosure, Albania shall disclose the beneficial owners of its licensees in the extractive sector starting from 1 January 2020.
4. Sales receipts
In line with new EITI disclosure requirements on first sales of oil, Albpetrol shall disclose the level of revenue collected annually out of crude oil sales. We recommend disclosing the movement in sales and collections by contractor annually in its website or via EITI report:
|Accounts receivables as at 1 January
|Value of sales made during the year (please provide value including VAT)
|Receipts during the year
|Accounts receivables as at 31 December
5. Reporting and Assurance
Albpetrol may either disclose the information listed in points 1 to 4 in its website or submit as part of its annual EITI reporting.
To enhance credibility and reliability of the information disclosed, Albpetrol shall engaged its external auditor to perform assurance procedures and report on the accuracy and completeness of the annual disclosures and reporting made under the EITI.