The 22 World Oil Congress, held in Istanbul, Turkey, from the 9 to the 13 July 2017, saw representatives of countries participating in the forum engage in negotiations and bilateral meetings to discuss the situation in the oil market.
In his speech, the Albanian prime minister stressed the untapped oil resources in Albania, which could make the country into the new oil frontier, inviting participants to invest in this sector in Albania.
The statements were the starting point for a reflection on the history of oil research in Albania, in which Italy played a leading role.
The first reports of oil in Albania date back to 1917, when an Italian Navy officer deduced it from the presence of abandoned bitumen loaves in the port of Valona, from the knowledge of some places with symptomatic names, such as "Fiamme Ardenti", and from the outcrops of oil on the banks of the Shushica river. The Navy took care that the matter was studied more thoroughly with the help of a commission of experts in the oil sector and competent geologists.
At the end of the investigations, the Commission presented a favorable report on the development of research in Albania, Drasciovizza specified, the location of exploration, and also mentioned the interest in purchasing the Selenizza bitumen mine, of which the Societè Française des Mines was the licensee. Selenitza.
Following these conclusions, the Regia Marina was interested in buying some exploration instruments without hesitation, while the Società Petroli d'Italia, with the suggestion and support of the Italian Navy, joined with the Società Petroli e Bitumi, taking over the concession of the Selenizza mines from French company and setting up the Italian Society of Selenizza Mines - SIMSA.
To facilitate the exploitation of Albanian mineral wealth, the Navy concluded an agreement with SIMSA, according to which the bitumen already extracted and lying in Albania was purchased by the Navy and the company undertook to carry out oil searches in the Selenizza concession area . Almost immediately 100 - 200 tonn was obtained from the first drilled well. of naphtha highlighting the need to extend and deepen research.
While the works for the exploitation were being prepared, the events of the 1920 forced Italy to withdraw from Albania, rendering all the work done. The results of the Italian activity in the search for oil fields in Albania, however, aroused the interest of the great British and American companies, Anglo-Persian Oil Company and Standard Oil, L'Anglo - Persian moved first by presenting in the 1922 a scheme of Convention to the then Prime Minister Iliaz Vrioni.
The convention arouses the reaction of the other foreign powers interested in the Albanian oil concessions, United States, France and Italy, which allied themselves in an action of pressure to the Albanian Government in order not to approve a concession judged of monopolistic character that excluded the other companies from oil searches in the Albanian territory.
After long diplomatic negotiations it was possible to put an end to a difficult situation for the Government of Zog and in the 1925 they agreed a series of oil research concessions including that at SIMSA in the area of Drasciovizza and that to the Italian State Railways for an extension of approximately 50.000 hectares.
The first concession agreement for oil searches between the Administration of the Italian State Railways and the Albanian Government was signed 12 March 1925 and granted “the exclusive right to search and exploit oil, natural gas, bitumen and asphaltic rocks suitable for produce oil by distillation ”on a total of 47.000 hectares divided into various perimeters.
Once the concessions had been obtained, the problem of research had to be dealt with rapidly and a special technical organization could be set up to provide the contractual terms with the Albanian Government. Therefore with Royal Decree Law 8 July 1925 n.1301, the Italian Petroleum Company of Albania was established, autonomous management framed in the Administration of the State Railways, which at that time depended on the Ministry of Communications.
With the second 15 Convention on July 1926 there was a further extension of the research areas reserved for the State Railways, thus reaching a surface area of around 164.000 hectares. Both conventions, negotiated in competition with foreign groups and with very favorable forecasts for oil prospects contained clauses such as the recognition of a fixed income in favor of the Albanian government to the extent of 13% of the oil extracted and the obligation to build refineries in Albania when it was passed to the exploitation phase.
Subsequent additional agreements entered into the 12 July 1932 and the 19 March 1936, negotiated under the influence of not always favorable diplomatic relations between the two countries and in the framework of wider negotiations between the two governments, did not substantially alter the original Conventions, on the whole, leaving the proportional return of the 13% measure unchanged, but recognizing to the State Railways the right of option on all the land left free by previous concessionaires or that were later freed for any reason.
The History of AIPA
- AIPA - The Italian industrial initiative in Albania - 1935-1943
- View the Photo Gallery - Photo Credit: “Archivio Tagliarini”
The development of research work by the AIPA was set up in three areas: Coastal area, 30 km north of Vlora; Intermediate area between the valley of the Vjosa, of the Shushica and of its tributary Vlajna; Internal area, situated along the lower course of the Devoli river, near the confluence of the Osum.
The survey work began in the 1926 in the coastal area and the intermediate zone and was pushed to the end of the 1927 also in the internal Devoli area, despite the very serious organizational difficulties due to the state of the country, the distance from the ports of landing, the lack of roads, bridges, and generally to the living and working conditions then existing in Albania. The results in the first areas studied and in which the perspectives seemed better, were negative in the coastal area and only partially positive but without industrial importance in the intermediate zone.
At the end of the 1928 and in the 1929 the research started in the internal area of the Devoli began to present wells that produced in considerable quantities dense asphalt-based oil, leading the company to concentrate most of the means and its organization in this area. Most of the research wells, including the first carried out for the identification of the deposit, were productive and became exploitation wells.
Subsequently, based on favorable surface indications and geological studies, research began in the area north-west of the Devoli basin, on the edge of the Dumreja plateau. From the 1930 to the 1939, 12 deep surveys were carried out in this area and 7 geological study soundings for a total of 8.860,90 meters drilled, but without encouraging results. Research was suspended with the intention of resuming it following new studies and waiting for more powerful machinery to be available.
In the early months of the 1933, following the results of the assessment and extension surveys carried out at Devoli, the identification of an oil field of approximately 700 hectares was confirmed and the total production capacity was assessed at at least 10 million tons of oils.
The project to exploit the field was based on the directives to build the plants in order to arrive at an annual production of 300.000 tons of crude oil; starting the regular exploitation and transportation of oil in Italy within 4 years from the beginning of the works and reaching the set annual production limit in 10 years. The project was approved by the 524 law of 8 in May 1933, and the necessary funds were also allocated for implementation, making it possible to start immediately after the executive studies and preparatory work.
AIPA was able to complete the essential part of the production and transportation facilities (pipeline) by the end of the 1935 so that the 25 December 1935 only two and a half years after the allocation of funds for the transition to exploitation of the Devoli field, the first shipment of Albanian crude oil on a tanker to an Italian refinery was carried out in Vlore. From that moment production continued regularly with increasing pace as well as oil transports.
The exercise of the exploitation of Devoli required the establishment and construction of a very remarkable complex of plants, from wells to the oil pipeline and other ancillary facilities with an asset investment that until February 1939 amounted to Lire 133.483.019,47. These expenses financed the surveys of exploitation and production facilities; the pipeline and the tanks; industrial plants in Devoli (power plant for electricity production, maintenance workshop, etc.); the gas repression plant as it was necessary and convenient to return the maximum amount of gas to the production formations to maintain the layer pressure and make the most of the expansive force; the roads manufactured land; drilling machinery and equipment (27 rotary probes, 13 percussion probes, 3 rotary probes for mining research).
Immediately after the Italian military intervention in Albania, the Ministry of Communications, on which the State Railways depended, asked and obtained that the exclusivity of oil rights for research and exploitation throughout the Albanian territory was entrusted to AIPA.
Having obtained the approval of the project by Mussolini, the 3 June 1939 was presented to the Undersecretariat of Albanian Affairs and to the Minister of Finance, a complete study on the executive plan of a first group of research works in various areas, to arrive in the shortest possible time possible time to get to know the oil possibilities of the country and their exploitation.
The plan foresaw the execution by 5 years of 26 surveys for a total of 33.000 m drilled in areas where the studies gave hope for positive results: Patos; north of Selenizza; Dumreja; Berat; Elbasan; Kuçi - Lushnje; Vrap-Tirana; Semeni.
From 1 July 1940 the AIPA management was transferred with a special law to the AGIP with the intention of achieving ever better coordination of all productive oil activities. In November of the same year, a new agreement was stipulated with the Albanian Government which, in addition to sanctioning the transfer to the AGIP of all the rights previously granted to the Ferrovie dello Stato, granted the company the exclusivity of the right to search and exploit oil, natural gas and hydrocarbons in general throughout the Albanian territory. the convention also reviewed the burdens on the exploitation of oil in Albania.
From the beginning of the war in July 1940 to April 1943 the Company had made available to the Italian Government 406.800 tons of crude oil which, given the international contingencies, it would not have been possible to buy elsewhere. The Albanian oil was almost completely sold to the ANIC to be treated in the plants of Bari and Livorno to obtain aviation gasoline and fuel essentially intended for the armed forces.
The activity of the AIPA was seriously disturbed and conditioned by the war events and came to cease completely when the Albanian National Liberator Council enacted by law the confiscation of AIPA's assets and the cessation of all obligations assumed by previous governments, a provision with no allow to exploit the other fields identified but not yet put into production such as Marinza and Zhabokika. Examination of AIPA's technical reports from 1938 onwards shows that the estimate of recoverable reserves amounted to 25 million tons (166 million barrels) only in fields already in production, of which 12 million to Devoli, 10 million at Patos and 3 millions from tar sands always in Patos.
From the 1945 begins a new phase of the state-run Albanian oil industry and conditioned by Albania's international alliances especially with the Soviet Union. In those years the creation of the Albanian Geological service took place, the establishment of the geological address at the Faculty of Engineering at the University of Tirana and other industrial support facilities in Kuçove and Patos. Even after the break with the Soviet Union, production does not stop but other deposits are put into production.
Currently the oil reserves are estimated in 437.645.143 tons of which 81.025.885 tonn are extractable. This value is believed that in light of the inevitable technological evolution in the exploitation of the fields, it may be susceptible to an increase in the 50-60% which would bring the extractable reserves to 110-120 millions of tons of crude oil.
Follow Albania News on Google News