Speech by Prime Minister Edi Rama at signing ceremony of Production Sharing Contract with the Italian energy company ENI for the exploration of Dumre onshore block:
Good afternoon!
This is a very important moment for our country, for the development of the hydrocarbon sector and for the future of our country’s economy, the moment that led us to the signing of an agreement with the renowned Italian company ENI.
This the sequence of a long history, because as early as 1903, when Albania was still part of the Ottoman empire, the Italian engineers were the first ones who came here and began forming an opinion about our underground resources and explorations continued then in 1918 with the first drilling of a well in Vlora’s Drashovica region and it was our Italian friends’ merit, of an Italian company Azienda Italiana Petroli Albanesi (AIPA) back then, which, for the first time, was established as a truly structured company to extract and refine oil. Since 1928, when the first drilling took place in Kuçova and until the end of 1944, when the Italians eventually left our country, AIPA carried out thousands of drilling and the country’s oil production was estimated at 950,000 tons.
However, our historical relation with oil is somehow complicated also for reasons, primary political and historic ones. It is said that when Victor Emmanuel was introduced the idea to invade Albania in 1939, he raised the question: “Why on earth the Italian kingdom would need 28,000 square km of rock across the sea?” And Count Ciano replied: “Those rocks could 100% meet Italy’s needs for chromium, 30% of needs for petroleum and through small-scale investment we could fully meet Italy’s needs for iron.”
The history is then known how it proceeded with a period of settling a dispute that hampered the sector’s normal development amid an effort to strengthen human resources within the country and, for the sake of truth, highly-qualified human resources were developed, but the country’s total isolation from the rest of the world extremely limited the country’s development and technological capacities. However, immediately after the fall of dictatorship, in September 1991, La Repubblica newspaper published a story entitled “ENI adopts Albania.” The article was about an exploration operation in a 30,000 square kilometre of Albania’s offshore perimeter, but indeed it took us 30 years to sign today not just a contract with ENI, not only a contract that in terms of its economic value for the Albanian state and the Albanian citizens is the best and most favourable contract ever signed. For this, I would like to wholeheartedly thank our Italian friends who proved to be very open and constructive regarding our request to reach a contract that would be of direct and greater benefit to the state compared to the previous contracts and that would provide a much better well-structured in terms of time, but in addition to that, to have a partner that will not only explore and discover oil in Albania, but will also help increase the quality of our human resources and we have also discussed to include ENI in the framework of the Pact on University in a direct relationship with the Faculty of Geology and Mining to help build capacities, open up opportunities for training and so on.
I am very glad that we signed this contract today, although it coincided with a very difficult moment, but it was the Minister and the negotiating team who insisted to bring Italian friends ahead of the New Year’s Eve, because this was the objective, to conclude this contract within this year and continue then the exploration work.
According to all studies, the Dumrea Block, where exploration will begin, has a significant reserve, just as the oil discovery in Shpirag is another reason and a further incentive to continue exploration. I am also pleased to emphasize that this is about another major foreign direct investment in Albania by a giant multinational company with annual revenues higher than Albania’s GDP, which now flies a heavyweight flag on the map of foreign investments in Albania. And beyond the monetary and economic value this investment will generate, it will also provide the country with the great value of know-how and the great value of a co-operation that will qualitatively increase all the space this sector covers.
To conclude, I believe I have our friends’ and company executives’ consent to say that I am very pleased that we have been congratulated and praised by the company for the speed and efficiency in the process of contract processing and signing. I am very glad that we have set a concrete example of the big difference between what is perception, when it comes to making foreign investments and signing contracts in Albania and what is the reality, so, in a process launched in the second half of the year, we are here today to conclude with a contract that in our view is an extremely solid one and with a significant expected benefit to the state, society and our economy.
The discoveries made to date and the expected discovery by the Italian company will certainly have a tremendous impact on the country’s economy in the years to come, but what is important today is that work starts immediately after the contract is signed.
I would like to thank all Italian friends here for their commitment, readiness to sign such a favourable contract for us and, at the same time, I am convinced that since they have been so generous with our requests, they will surely discover abundant oil reserves, so their gains will be fully deserved.
