AEI Updates May 2015Posted by Adv. Lorenc Gordani, PhD Sat, May 09, 2015 15:57:34
Albanian Oil Privatization
Nga Klevis Llaha 09 May 2015
The Minisry of Energy and Industry has developed the legal framework for the extraction of 13 oil blocks for exploitation by the private sector. Petroleum Policy Director at the ministry, Dritan Spahiu, said in an interview for SCAN TV that the decision of the Council of Ministers No. 335, has enabled the transfer of ownership of these blocks from Albpetrol to the Ministry of Industry. Thus enabling the preparation of the privatization process of these areas.
From the areas that will be used for detection operations, there will be a block in the sea as
well. Albania is estimated to have oil reserves amounting to 400 million tons, while only 10%
of this amount has been utilized so far. However, there have not been conducted further
specific studies after the 70’s.
In the meantime, the new discoveries in the district of Berati have attracted high interest for
investments in our country from international companies.
AEI Updates May 2015Posted by Adv. Lorenc Gordani, PhD Sat, May 09, 2015 11:04:23
THE REVIVAL OF NABUCCO WEST: MYTH OR REALITY
May 06th, 2015
The revival of the Nabucco West is doomed to failure unless the Trans-Caspian Pipeline is realized. There is no sufficient amount of available gas for the pipeline, which primarily intended to transport Caspian gas. However, the project which was supposed to be dead long ago may become effective in a short period of time, if it is filled by the Russian gas, built by other (than Russian) sponsor and accepted by the official Brussels. Hence, the Russian gas can hardly be considered as an alternative to the Caspian gas to be delivered via NW, because the EU intends to decrease the gas dependence from Russia.
On 4th of March 2015 Bulgarian Prime Minister Boyko Borisov at the meeting with the President of Azerbaijan Ilham Aliyev mentioned the possibility of the revival of the Nabucco (named after Giuseppe Verdi’s opera) West pipeline. However, the idea of the restoration has started well before. After the cancellation of the South Stream pipeline there was a necessity to ensure the security of supply for the future gas demands of Bulgaria. “The very idea of the reincarnation was mentioned following a meeting with the British Prime Minister David Cameronon 19th of December, 2015.” It is worth reminding that the project was suspended in 2013, when the stakeholders of Shah Deniz consortium preferred TAP to the Nabucco West (hereafter NW).
I. Milestones and the Challenges
After the initiation of the Nabucco project by Austria in 2002, Russia decided in return to launch the project (South Stream), which was intended to deliver massive volumes of gas to the same market. As an alternative, NW project, which is much shorter than Nabucco, was proposed. The route of this project is not much different from the South Stream’s (Romania on its way instead of Serbia), but there is huge distinction in terms of capacity (31 bcm/year versus 63 bcm/year of the Russian pipe).
Following the termination of the South Stream, there was supposed to be no obstacle remaining before the NW. However, it has been argued that‘the train hasgone’ already.
Lack of available gas
Azerbaijan, currently the sole gas supplier from Caspian Sea to Europe, has allocated most of its exportable gas resources to the Trans-Adriatic Pipeline (hereafter, TAP) project (to be operational by 2018-2020). According to the Energy Union the potential sources for the future gas demands of the EU are named to be Azerbaijan, Turkmenistan, Iran and Iraq. Whereas Iran is still under tough sanctions and its gas infrastructure remains embryonic, Iraq is fighting against ISIS. Even if the majority of sanctions on Iran are lifted it is too premature to make any prediction on the possibility of Iran’s gas exports to the EU. Today, Turkmenistan has got no capability to deliver gas to the EU. Hence, since the first (10 bcm/year by 2020) and second stages (20 bcm/year) of transportation of Azerbaijani gas to the EU have already been fully guaranteed from Baku, there may be no necessity for Turkmeni gas unless the capacity of the pipeline is enhanced up to the level of 31 bcm/year (approximately by 2025). It is too early to make any anticipation for the next decade, but it is clear that both the EU and Turkey are working hard to make a breakthrough in the agreement over the realization of Trans-Caspian Pipeline (hereafter TCP), which in turn will make gas deliveries from Turkmenistan to the EU in future possible. On 2nd of March 2015, “the Ministry of Petroleum and Mineral Resources of Turkmenistan made a statement: “A huge resource base of hydrocarbons onshore and offshore allows Turkmenistan to increase the exports of natural gas to the world markets, to develop the new routes of its exports in the eastern and the European directions," the statement said.” Thus, practically speaking there is no sufficient amount of available gas for the pipeline, which primarily intended to transport Caspian gas. Therefore, NW may come true if it alters the source of supply or expects until the TCP is realized.
Reluctance to import Russian gas
Russia did not just put to an end the South Stream project, but presented another project the so-called ‘Turkish Stream’, the primary intention of which allegedly is to reach the same market as its predecessor was willing to (except for Turkey). NW can be a link between the ‘Turkish Stream’ and the EU, since its final destination is expected to be Baumgarten. The Austrian gas hub is the point from where Russia is able to sell its gas further to the West. Having said that it is worth mentioning the fact that Energy Union explicitly stated the intention of the EU to decrease the gas dependence from Russia. So, Russian gas can hardly be considered as an alternative to the Caspian gas to be delivered via NW. Moreover, there is no EU state other than Bulgaria, which has been strongly supporting the implementation of NW.
What does the revival of NW mean?
One should not view the declaration of the reincarnation of the NW in isolation, nor its renaissance should be regarded as a turning point of the future energy face of the EU. However, the whole picture of gas supply in the EU is being shaped. Russia is changing the strategy as regards to the gas sales to EU. It does not anymore deal with the end customer. EU in turn does not seek more gas from Russia. “As part of a revitalized European energy and climate diplomacy, the EU will use all its foreign policy instruments to establish strategic energy partnerships with producing and transit countries such as Algeria and Turkey; Azerbaijan and Turkmenistan; the Middle East; Africa and other potential suppliers’.”It continues its intensified discussions with Turkmenistan. Turkey on the other hand takes the leading role in negotiations with Turkmenistan and Azerbaijan on the implementation of the TCP. Despite the fact that the conflict between the Caspian states over Kapaz (Serdar) and other fields is not over yet, the rhetoric is much warmer than it is used to be. So far, Turkey has been successful as a unifying actor, but the existing problems between Turkmenistan and Azerbaijan and uncertainty over the Caspian status are still there. Thereby, within the changing rules of the game in natural gas market, there can be different scenarios for the NW and its fate is yet to be determined.
II. Possible Future Scenarios
At first hand, the revival of the NW pipeline seems to be a political declaration only, nothing else. However, it is worth looking at it from different angles.
Substitution for the South Stream?
It may sound paradoxical, but the rebirth of the NW may be the result of the cancellation of the South Stream and its alteration with the ‘Turkish Stream’. The reason is simple, despite the EU’s economic sanctions against Russia, the latter will continue its domination in terms of the exports of natural gas over the former. Moreover, Russia’s reluctance to be engaged into the conflict with the Third Energy Package (hereafter TEP), may result in implementation of non-Russian pipe delivering Russian gas, such as NW. “Following Kremlin’s decision to terminate South Stream, the statements of high profile decision-makers in Bulgaria, Serbia, Hungary and especially Austria about the significance of Russian gas are the initial clues for prospective renegotiations. In today’s conditions, Russian gas is indispensable for these countries. The European partners of the South Stream project are dependent on Russian gas at the following levels: Bulgaria 100%, Serbia 100%, Hungary 43.7%, Slovenia 45.2%, Austria 71% and Italy 28.1%.” Russia may benefit from the NW project with the condition that the realization of the project will occur without its involvement. Head of Gazprom Alexei Miller repeatedly stated the necessity for EU to link up to the ‘Turkish Stream’. Thus, hinting that the EU will have to build routes to the border with Turkey itself. This is actually explains the rationale behind the talks over the revitalization NW, “since it is the only project which has been worked over and over and able to bring such a big volumes.” So, if one takes the realities of the political conjuncture, then NW seems to be the only suitable option for both sides (EU and Russia), with the condition that ‘Turkish Stream’ is there. “From the perspective of the EU, NW can solve the possible gas supply problem faced by the European partners of the former South Stream project. The realization of NW may be an indirect political victory against Russia by the EU.” NW has got almost same route as the South Stream so there will hardly be any challenges in terms of defining the potential customers for Russian gas. The project which was supposed to be dead long ago may become effective in a short period of time, if it is filled by the Russian gas, built by other (than Russian) sponsor and accepted by the official Brussels. However, it will be extremely tough to get EU’s approval, taking into consideration the status-quo.
Fusion with TAP
Some experts find the assumptions behind the merge of TAP and NW projects into one viable. The logic behind it is the following: since Azerbaijan wants to diversify end clients in the EU, its natural gas resources could be added to massive volumes of Gazprom (which will presumably deliver its gas to the region via the ‘Turkish Stream’) and pumped into NW. At the meeting with the Prime Minister of Bulgaria, the President Ilham Aliyev said that what really matters is to bring more Azerbaijani gas to Europe, and that the name of the future pipeline is not important. "We think that we can unite TAP and Nabucco. It is not important what you call this route.”Aliyev said. "The more EU countries receive our gas, the better for all." Nevertheless, it is doubtful that the president implied the participation of Russian gas in the unification. It was rather an expression of openness and availability of Azerbaijani gas to be delivered to any EU member state by any means of transportation, be it future interconnectors or NW.
Theoretically speaking the conflux of TAP and NW is quite feasible; hence Azerbaijan will hardly be willing to participate in the project as a partner of Russia, because of limited reserves for export and reluctance to have a strong rival in the same region. Moreover, there is no need for Azerbaijan to build a new pipeline to reach other customers within the EU. It may sell its gas at the hub in Italy and/or via the future interconnectors of Greece or Turkey. On the other hand, as it was mentioned earlier, Russia is not interested in building pipeline within the EU. Therefore there is a need for impetus from the EU to build such a pipeline. At the moment such a scenario seems to be remote from the reality. Azerbaijan continues considering this project financially non-profitable. In fact only the agreement over the Trans-Caspian pipeline may positively contribute to the debates over the expediency of the NW.
NW with a different name?
Bulgaria also pays special attention on the Slovakian project called Eastring. The pipeline, which is going to be built from the Slovakia-Ukrainian border to Bulgaria-Turkish border will be ready by 2018 with the capacity of 40 bcm. per annum. As one may notice, TAP project will be able to deliver that amount of gas neither at first nor at the second stages of its development. Therefore, it is not hard to calculate what source of gas this pipeline is intended for. Thus, Bulgaria does not renounce from the Russian gas and ready to become one of the clients or at least the transporter for the ‘Turkish Stream’ gas. This project aims at building the necessary infrastructure for brining the gas from South-East Europe to the Northern and Western parts of Europe both gas from the Caspian basin, Russia and Middle East. The pipeline has got several advantages over NW. First of all it does envisage the participation of Ukraine in the project (although at the limited extend), thereby Eastring overcomes the fears of the EU over the plans of Russia to bypass Ukraine while delivering gas to Europe. Secondly, there is not much investment needed, since some gas transportation routes on its way already exist. Therefore, by building few interconnectors the chain called Eastring will become fully operational. Last but not the least, “Eastring is fully compliant with all EU rules and their spirit, a project with unrestricted access for third parties.” Bearing all these facts in mind, one may strongly doubt the necessity for the NW.
III. What is the aim of Bulgaria?
Possible gas shortages
Apparently, Bulgaria attempts to restore the mentioned project firstly to guarantee its energy security. Today 100% of Bulgarian gas comes from Russia. In case if NW is actualizedit will be able to cover the possible shortages of gas that Bulgaria may have once Russia ceases to deem Ukraine as a gas transit country. Ilham Shaban, the head of the “Caspian Barrel” Oil Research Center, disregards this argument.“Once the supply of Russian gas via Ukraine is over, Bulgaria will be able to use the pipe through which Turkey gets the gas via Romania and Bulgaria and be able to utilize it in reverse.”This statement has some truth in it, because Turkey has already got many routes of supply. Bulgaria can get the gas from the would-beinterconnector with Turkey as well,based upon the resources from the future‘Turkish pipeline’ or Iran. It can also receive natural gas from the interconnector with Greece (expected to be operational by 2018) based on the TAP gas or LNG in Greece. It is worth mentioning that Azerbaijan has already vowed to deliver 1bcm/year to Bulgaria through Greece once TAP becomes operational (by 2020). At the moment total gas consumption of Bulgaria is about 3bcm per annum. Thus, taking into account the fact that Bulgaria may cover relatively modest amount of gas demands through additional imports of gas from TAP or upcoming interconnectors, one can hardly buy the argument of inevitability of the NW as the only way to overcome the future shortages.
Russia was planning to rehabilitate two reactors of Bulgaria’s nuclear plant, but after the ‘inadequate’ position of Bulgaria on the South Stream (Bulgaria was postponing the decision over the sanctioning the project), there is an uncertainty to certain degree. This in return would lead to what Prime Minister Borisov called a ‘catastrophe’. “In his words, Russia was expected to rehabilitatethe units 5 and 6 of the Russian-built Kozlodui power plant. Units 1 to 4 have been decommissioned as part of Bulgaria’s EU accession deal, but units 5 and 6, of a more modern design, could continue to function for many years, provided that they are rehabilitated by the company that built them.”“Bulgaria depends on Russia for all of the nuclear fuel needed for its Kozloduy nuclear power station, which has two functioning reactors.“I’m confident in the security of Units 5 and 6, but the issue is that their rehabilitation could cost too much, and last too long. Stopping one of the reactors is a catastrophe for Bulgaria, its economy and its citizens won’t be able to pay the bills, as the remaining electricity that it produced is way too expensive,” Borisov said.” In other words, Borisov does not want its country to suffer because of being in the battlefield between two conflicting partners. It is worth mentioning that the current Prime Minister has been once forced to resign because of high prices for electricity, thus inability to solve its energy problems may have a disastrous effect for him and his cabinet.“On February 20, 2013, Borisov had to resign from government as a result of mass protests in the public protests in the capital and several other cities over the price of electricity.”It comes as a no surprise that the gas shortage would lead the price for natural gas to skyrocket. Although the 2013 unrests had much to do with the prices on electricity, one may see no reason why high prices for natural gas may not have the same effect. Thus, the hiked prices may lead to the boisterous protest, which in the end may again cause the resignation of the government. Taking all these assumptions into account one may understand the anxiety of the Prime Minister before the imminent resignation. Borisov simply wants to avoid ‘stepping on the same rake’.
Willingness to become a gas hub
Bulgaria, along with its primary goal (to meet its demand for natural gas), definitely wants to use this very opportunity and expand its role in international arena. Taking into account the massive volumes of gas to be concentrated soon on the Turkish-Bulgarian and Greek-Bulgarian borders, the government’s attempt to turn Bulgaria into a gas hub sounds rational.The source for the hub could be gas from Azerbaijan, Russia (if the ‘Turkish Stream’ is realized),LNG in Greece, or any other source.At the meeting with the Vice-President responsible for Energy Union, Maros Šefčovič on 12th of January, 2015 Borisov said:“… the gas hub could become one of the infrastructure projects under Commission President Jean-Claude Juncker investment plan.”For his part, Šefčovič gave no assurances regarding the Bulgarian idea of a gas hub. A joint communiqué says the sides had agreed that a “high level group” tasked with advancing important energy projects in South Eastern Europe would first meet in Sofia and “analyze the energy situation in the region and, amongst others, whether and how these conditions can be met by the creation of a gas hub in Bulgaria”.”On 9th of February 2015 representatives of Austria, Bulgaria, Croatia, Greece, Hungary, Italy, Romania, Slovenia and Slovakia as well as European Commission Vice-President for Energy Union Maroš Šefčovič and Commissioner for Climate Action & Energy Miguel Arias Cañete have held the first meeting of the Central East South Europe Gas Connectivity (CESEC) High Level Group in Sofia, but there was no hint on the establishment of gas hub in Bulgaria mentioned in the in the joint press statement. However, participants agreed to that each of them should get access at least to three different gas sources.
In terms of the natural gas infrastructure Bulgaria is among the least developed countries in EU. Furthermore, unlike any other gas hub, it does not have enough storage facilities. “Bulgarian natural gas is stored in Chiren underground storage facility owned by Bulgartransgaz with its 550 million m3 capacity.” Moreover, Bulgaria still negotiates the interconnectors with Serbia, Romania, Greece and Turkey. Absence of final decision on interconnectors makes the future gas situation around Bulgaria even more blurry. “It’s not a physical problem, it’s a failure of political will, and a failure to implement the Third Energy package in its entirety in the countries involved,” Brendan Devlin, advisor in the Commission’s DG energy said.” Taking all these facts into account Bulgaria’s dream to become a gas hub in the short-run most probably will remain to be so.
To conclude, it is too early to predict the demise of the revival of the NW pipeline. At first glance, the project which was oriented towards the Caspian pipeline is primordially doomed to failure. Firstly, there is a lack of available volume to fill the pipe. Secondly, the pipeline which would carry natural gas from Turkmenistan is not there and unlikely be there in near future. Hence, one should also assume the possibility of alteration of the initial goal of NW. There are certain ways to bring the project into the reality. One option is to guarantee the supply of Russian gas (to be delivered by the ‘Turkish Stream’). The only problem with the argument is the absence of approval by the EU. The support of EU in realization of the project may not be sufficient, but it is vital and mandatory. Even though Russia remains the major supplier of gas, EU has no intention to further enhance the imports from Russia. Therefore, NW guaranteed to be filled by Russian gas will not be realized unless their relations will change. Another option is to merge two projects, i.e. TAP and NW into one. However, Azerbaijan does not have enough resources to distribute to TAP, but even if it gets more natural gas in future from the prospective fields Azerbaijan would hardly be willing to allocate its resource to the project where the dominant role is give to Russian gas. Thirdly, there is a pipeline on the table called Eastring, which presumably going to play the same role as of NW.. Although, the project is still at initial phase and the routing is yet to be defined, it seems to be very promising.
Thus, one may come up with the question on the necessity and rationality behind the statement over the revival of NW. It was officially presented by the Prime Minister of Bulgaria with the aim to overcome several challenges the country may face in near future. Since, Bulgaria imports natural gas via Ukraine, gas supplies to the country is under the threat. It wants to diversify the routes and even the sources by reincarnating the NW pipe. Bulgaria just desperately needs alternatives to the South Stream, in that context NW would become a lifebuoy.
All in all the logic behind the project is rather political, with some (although poor) possibilities of its realization. Those possibilities stick to cornerstone points: realization of Trans-Caspian Pipeline, realization of the Turkish Stream, EU’s approval to build NW, EU’s approval to fill the pipe with the Russian gas etc...
Elmar Baghirov is a graduate of the International Affairs Master program at Azerbaijan Diplomatic Academy who is focused on the energy security issues
Reference List1. Bulgarian PM Discusses Energy Projects at EU Council, December 19, 2014 http://www.novinite.com/articles/165531/Bulgarian+PM+Discusses+Energy+Projects+at+EU+Council
2. TAP project development schedulehttp://www.tap-ag.com/the-pipeline/project-timeline#22
3. Hasanov, H., “Turkmenistan can provide Europe with necessary gas volumes”, March 2, 2015http://en.trend.az/business/energy/2369604.html
4. Matalucci, S., “3 Pillars of New 'Energy Union' Leaked Document”http://www.naturalgaseurope.com/eu-energy-union-pillars-acer-lng-strategy-strategic-partners-22258
5. Новая интрига Nabuccohttp://pcsu.ru/%D0%BD%D0%BE%D0%B2%D0%B0%D1%8F-%D0%B8%D0%BD%D1%82%D1%80%D0%B8%D0%B3%D0%B0-nabucco
6. Gas Interconnector with Greece Expected to be Launched by 2018, February 12, 2015http://www.novinite.com/articles/166496/Gas+Interconnector+with+Greece+Expected+to+be+Launched+by+2018
7. Gotev, G., “Borissov warns of Bulgarian energy ‘catastrophe’”, January 12, 2015http://www.euractiv.com/sections/energy/borissov-warns-bulgarias-energy-projects-catastrophe-311192
8. Gotev, G., “Bulgaria wants to revive Nabucco, Azerbaijan says pipeline name ‘not important’”, March 05, 2015http://www.euractiv.com/sections/energy/bulgaria-wants-revive-nabucco-azerbaijan-says-pipeline-name-not-important-312645
9. Joint Press Statement by Ministers and Representatives of Austria, Bulgaria, Croatia, Greece, Hungary, Italy, Romania, Slovenia and Slovakia and the European Commission, February 09, 2015http://europa.eu/rapid/press-release_STATEMENT-15-4281_en.htm
10. Apaydin, C., “A Comparative Study on the Natural Gas Outlook of Romania, Serbia and Bulgaria”, February 24, 2015http://www.hazar.org/blogdetail/blog/a_comparative_study_on_the_natural_gas_outlook_of_romania_serbia_and_bulgaria_1122.aspx
11. Gotev, G., “Bulgaria lacks political will to build interconnectors, says Commission”, March 06, 2015http://www.euractiv.com/sections/energy/bulgaria-lacks-political-will-build-interconnectors-says-commission-312709
12. Ertas, U., “The New Russo-Turkish Pipeline: A New Chance for Nabucco West?”, January 16, 2015http://www.naturalgaseurope.com/russo-turkish-pipeline-nabucco-west
13. Гурков, А., “Комментарий: Nabucco возрождается благодаря ‘Турецкому потоку’”, March 09, 2015http://www.dw.de/%D0%BA%D0%BE%D0%BC%D0%BC%D0%B5%D0%BD%D1%82%D0%B0%D1%80%D0%B8%D0%B9-nabucco-%D0%B2%D0%BE%D0%B7%D1%80%D0%BE%D0%B6%D0%B4%D0%B0%D0%B5%D1%82%D1%81%D1%8F-%D0%B1%D0%BB%D0%B0%D0%B3%D0%BE%D0%B4%D0%B0%D1%80%D1%8F-%D1%82%D1%83%D1%80%D0%B5%D1%86%D0%BA%D0%BE%D0%BC%D1%83-%D0%BF%D0%BE%D1%82%D0%BE%D0%BA%D1%83/a-18304369
14. Павлов, С., “Болгария ищет, но пока не находит реальной альтернативы российскому газу”, March 09, 2015http://bnr.bg/ru/post/100530803/bolgaria-ishtet-no-poka-ne-nahodit-realynoi-alyternativi-rossiiskomu-gazu
15. Eastring at a Glancehttp://www.eastring.eu/page.php?page=project
AEI Updates May 2015Posted by Adv. Lorenc Gordani, PhD Fri, May 08, 2015 22:55:43
Bankers Petroleum Announces 2015 First Quarter
Financial and Operational Results
CALGARY, May 7, 2015
Cash Margin of US$23.32/bbl and Q2
Average Production to Date 19,700 bopd
CALGARY, May 7, 2015 /PRNewswire/
- Bankers Petroleum Ltd. ("Bankers" or the "Company") (TSX:
BNK, AIM: BNK) is pleased to provide its 2015 first quarter financial and
During the quarter, Bankers achieved a
cash margin for US$23.32 per barrel and netback ofUS$13.62 per
barrel. All amounts listed in this news release are in US dollars unless
Highlights for the quarter ended March
31, 2015 are:
Average oil production for the three
months ended March 31, 2015 was 19,767 barrels of oil per day (bopd)
compared to 20,338 bopd in the previous quarter and 19,911 bopd in the first
quarter of 2014.
Oil sales averaged 20,283 bopd for the
first quarter of 2015 compared to 20,619 bopd for the previous quarter and 18,435
bopd for the first quarter of 2014. Crude oil inventory at March 31, 2015 decreased
to 270,000 barrels compared to 315,500 barrels at December 31, 2014.
During the first quarter of 2015, capital
expenditures were $50 million. The Company drilled 21 wells during the
quarter, comprised of 20 horizontal production wells and one lateral re-drill
in the main area of the Patos-Marinza oilfield. Capital expenditures were $72
million for the previous quarter and $60 million for the first
quarter of 2014. During the first quarter of 2015, Bankers reduced its active
rig count from three to two in response to low commodity prices.
Product Margin Highlights:
For the three months ended March 31,
2015, operating costs and sales and transportation (S&T) costs, originating
from Albanian-based companies and their employees, were $37 million($20.48/bbl)
compared to $42 million ($21.92/bbl) for the previous quarter and $31
million($18.41/bbl) for the first quarter of 2014. Overall, operating and S&T
costs improved by 5%, on a per barrel basis, from the fourth quarter of 2014 to
the first quarter of 2015, taking into account the $2.54/bbl impact of
excise tax for the first quarter of 2015 compared to $3.10/bbl for the
Net operating income (netback) in the
first quarter of 2015 was $25 million ($13.62/bbl) compared to $51
million ($27.01/bbl) for the previous quarter and $92 million ($55.75/bbl)
for the first quarter of 2014.
Cash margin for the first quarter of 2015 was $23.32/bbl
compared to $31.30/bbl in the previous quarter and $55.75/bbl in the
first quarter of 2014. Cash margin represents netback inclusive of the realized
gain on commodity contracts and recovery against an outstanding accounts
For the first quarter of 2015, revenue was $72
million ($39.66/bbl) compared to $109 million($57.29/bbl) in the
previous quarter and $145 million ($87.39/bbl) in the first quarter
of 2014. Field price realization represented 74% of the Brent oil benchmark
price ($53.94/bbl) for the first quarter of 2015 compared to 75% of the Brent
oil benchmark price ($76.58/bbl) in the previous quarter and 81% of the Brent
oil benchmark price ($108.21/bbl) in the first quarter of 2014. The reduction
as a percentage of Brent compared to the first quarter of 2014 was mainly due
to higher domestic sales during the first quarter of 2015.
Royalties to the Albanian Government and
related entities during the first quarter of 2015 were$10 million (14% of revenue)
compared to $16 million (15% of revenue) for the previous quarter and $22
million (15% of revenue) for the first quarter of 2014.
Funds generated from operations were $25
million ($0.095 per share) for the first quarter of 2015 compared to $23
million ($0.088 per share) for the previous quarter and $83
million($0.323 per share) for the first quarter of 2014.
The Company continues to maintain a strong
financial position at March 31, 2015, with cash of$58 million and
working capital of $174 million. At March 31, 2015, the Company had
drawn $111 million of its $224 million approved credit
facilities. Working capital for December 31, 2014 andMarch 31, 2014 was $201
million and $160 million, respectively.
Bankers recognized a $14 million ($7.74/bbl)
realized gain on financial commodity contracts during the first quarter of
2015. The financial commodity contracts represent 6,000 bopd at a floor price
of $80/bbl of Dated Brent for 2015. At March 31, 2015, the fair value
of these contracts was$42 million
The Company continues to execute on its
three part strategy to deliver reliable and repeatable low cost horizontal
wells through the primary drilling program, expanding its product margin
through surface-level improvements and accelerate the enhanced oil recovery
The second quarter 2015 quarter-to-date
average production is 19,700 bopd from the Patos-Marinza and Kuçova oilfields
in Albania, consistent with the first quarter average of 19,767 bopd.
Bankers intends to drill eleven (11)
horizontal wells in the second quarter; nine (9) horizontal production wells in
the core of the Patos-Marinza field, one (1) horizontal production well in
Kuçova and one (1) horizontal water disposal well.
Infrastructure and facilities projects in the
second quarter include the ongoing construction of the northern flow line
system, scheduled to be completed in the third quarter, the installation of
vapor recovery units and gas distribution systems to capture and utilize
associated gas and the electrification of well sites. Bankers expects to see
further cost savings throughout 2015 with the maturing of these projects.
The Company will continue to expand on the
polymer and water flood program with four (4) planned conversions in the second
quarter. The pace of injector conversions will be higher in the second half of
2015, following the installation of associated facilities and pipelines, with
up to 20 conversions in the third and fourth quarters.
The Company intends to issue the second
quarter 2015 operational update and host a conference call on Tuesday, July 14,
Carbon Dioxide Release – Remediation and
Following the carbon dioxide release that
occurred on April 1, 2015 during the drilling of a horizontal well,
Bankers is focused on two main objectives. First, coordinate with local
community officials to recover the affected area and return residents to their
normal lives through repair work and appropriate compensation for any damages.
Secondly, Bankers has undergone a thorough technical evaluation of our drilling
practices to ensure this does not happen again. Bankers operates with
world-class operational and safety standards; our highest priority is the
health and safety of our employees and the residents of the communities in
which we operate.
Caution Regarding Forward-looking
Information in this news release
respecting matters such as the expected future production levels from wells,
future prices and netback, work plans, anticipated total oil recovery of the
Patos-Marinza and Kuçova oilfields constitute forward-looking information.
Statements containing forward-looking information express, as at the date of
this news release, the Company's plans, estimates, forecasts, projections,
expectations, or beliefs as to future events or results and are believed to be
reasonable based on information currently available to the Company.
Exploration for oil is a speculative
business that involves a high degree of risk. The Company's expectations for
its Albanian operations and plans are subject to a number of risks in addition
to those inherent in oil production operations, including: that Brent oil
prices could fall resulting in reduced returns and a change in the economics of
the project; availability of financing; delays associated with equipment
procurement, equipment failure and the lack of suitably qualified personnel;
the inherent uncertainty in the estimation of reserves; exports from Albania being
disrupted due to unplanned disruptions; and changes in the political or
Production and netback forecasts are based
on a number of assumptions including that the rate and cost of well takeovers,
well reactivations and well recompletions of the past will continue and success
rates will be similar to those rates experienced for previous well
recompletions/reactivations/development; that further wells taken over and
recompleted will produce at rates similar to the average rate of production achieved
from wells recompletions/reactivations/development in the past; continued
availability of the necessary equipment, personnel and financial resources to
sustain the Company's planned work program; continued political and economic
stability in Albania; the existence of reserves as expected; the continued
release by Albpetrol of areas and wells pursuant to the Plan of Development and
Addendum; the absence of unplanned disruptions; the ability of the Company to
successfully drill new wells and bring production to market; and general risks
inherent in oil and gas operations.
Forward-looking statements and information
are based on assumptions that financing, equipment and personnel will be
available when required and on reasonable terms, none of which are assured and
are subject to a number of other risks and uncertainties described under
"Risk Factors" in the Company's Annual Information Form and
Management's Discussion and Analysis, which are available on SEDAR under the
Company's profile at www.sedar.com.
There can be no assurance that
forward-looking statements will prove to be accurate. Actual results and future
events could differ materially from those anticipated in such statements.
Readers should not place undue reliance on forward-looking information and
forward looking statements.
About Bankers Petroleum Ltd.
Bankers Petroleum Ltd. is a Canadian-based
oil and gas exploration and production company focused on developing large oil
and gas reserves. In Albania, Bankers operates and has the full rights to
develop the Patos-Marinza heavy oilfield, has a 100% interest in the Kuçova
oilfield, and a 100% interest in Exploration Block "F". Bankers'
shares are traded on the Toronto Stock Exchange and the AIM Market in London,
England under the stock symbol BNK.
SOURCE Bankers Petroleum Ltd.
AEI Updates May 2015Posted by Adv. Lorenc Gordani, PhD Fri, May 08, 2015 18:21:19Azeri gas to reach Europe by 2020
8 May 2015
Azerbaijan’s Energy Minister Natiq Aliyev said Thursday that Azeri gas would reach Europe by 2020. Speaking at a panel discussion at the Energy Security Conference in Berlin, Aliyev said a quarter of the construction on Southern Gas Corridor had been completed.
"We are sure that this project will be successfully fulfilled and implemented," said Natiq Aliyev.
"We are very encouraged to deliver 10 billion cubic meters of gas to Bulgaria, Greece and Italy in 2020," he added.
The Southern Gas Corridor is to carry natural gas starting from Azerbaijan near the Caspian Sea, to pass through Turkish territory to reach Greece, and then further on to Albania and Italy.
Aliyev expressed his confidence in the Southern Gas Corridor and underlined that Azerbaijan will be a key country for Europe’s efforts in diversifying its energy sources.
"Diversification is the main factor of the energy security. EU and European countries understand it very well," Aliyev told to an audience of senior European politicians and experts.
"For the last 10 years, they have been working very hard on the diversification, not only the routes but also the sources. Now one of the real sources for Europe is Azerbaijan," he stressed.
The Southern Gas Corridor would bring Azeri gas to Europe through three pipelines -- the South Caucasus Pipeline, the Trans-Anatolian Natural Gas Pipeline, TANAP, and the Trans-Adriatic Pipeline, TAP, along with an interconnector between Bulgaria and Greece.
Aliyev said that with the completion of TANAP by 2019, Azerbaijan will also increase its gas supplies to Turkey from 6 billion cubic meters today to 12.6 billion cubic meters, to become the second biggest supplier of the country.
The groundbreaking ceremony of the Trans-Anatolian Natural Gas Pipeline was held in March, in the northeastern Turkish city of Kars.
The project involves global energy companies SOCAR of Azerbaijan, Norway's Statoil, British Petroleum, Fluxes, Engages and Apo.
AEI Updates May 2015Posted by Adv. Lorenc Gordani, PhD Fri, May 08, 2015 13:57:46
15 energy infrastructure projects receive EU funding
Thursday, 7 May, 2015
The EU's Innovation and Networks Executive Agency (INEA
has signed 15 grant agreements for priority energy infrastructure
projects in Europe. These projects are the first of 34 projects to
receive a total of €647 million under the EU's Connecting Europe Facility
2014 call for proposals.
The projects – which are part of one of the 248 Projects of Common Interest
selected by the European Commission - aim to upgrade existing energy
infrastructure and develop new energy transmission infrastructure of
crucial importance to Europe's energy security. They will also support
the deployment of large-scale renewable energy.
One of the 15 projects – ElecLink
– centres on boosting electricity interconnection between France and
the UK. The EU's contribution of €1.7 million will cover half of the
cost of a set of studies needed before construction on interconnectors
In Bulgaria, a grant of €279,000 will go towards studies paving the way for the construction of three internal electricity lines in the country.
Another project – Front End Engineering Design
– will receive a grant of €1.8 million to prepare designs, technical
detail and administrative work needed for the construction of a new
offshore LNG facility in Greece and its connection to the national
natural gas transmission system.
The next grants to be allocated to energy projects under the CEF will
be selected under the latest call for proposals which closed on 29
AEI Updates May 2015Posted by Adv. Lorenc Gordani, PhD Thu, May 07, 2015 09:50:21
SOUTHERN GAS CORRIDOR AND THE INTEREST OF BALKAN NATIONS
May 07th, 2015
Azerbaijan is promising to supply Europe with even more gas than already contracted - 10 billion cubic meters a year (bcma) from the Shah Deniz 2 field in Caspian Sea.
The Caspian nation plans to increase natural gas output to 50-60 bcm per year. After hitting this target Azerbaijan will become one of the major gas exporters to the EU, said Energy Minister Natik Aliyev, speaking at the 3rd Global Shared Societies Forum in Baku.
Even the Shah Deniz2 could produce more gas than planned, according to Minister. “Shah Deniz 2 is aiming to produce 16 bcma of natural gas. However, it is not a limit; it could be 20 or even 25 bcma. But we should understand, that it is quite technically challenging project,” said the Azeri Energy Minister.
“With providing independent policy in energy issues Azerbaijan has been implementing major projects, including the Southern Gas Corridor (SGC). It will enable us to supply our gas to the European markets soon," said the Minister adding that Azerbaijan has no problems with financing of these projects.
With its vast energy resources, Azerbaijan is among the top ten countries with the highest volume of energy per capita, said Minister Aliyev.
“Last year we produced 42 million tons of oil. Gas production rose from 5 bcm in 2003 to 29 bcm last year,” he said adding that with estimated gas reserves of 2.6 trillion cubic meters its extraction can be extended to 90 years.
Azerbaijan considers the western market as most attractive to export its energy resources. Europe could be destination for supply oil and gas for Central Asian nations also, said Aliyev.
"The European market is attractive for energy supply. For years we are in talks for deliver gas from Central Asia to Europe. As is known, Turkmenistan along with Russia and Qatar also huge gas resources," said Aliyev, adding that today (30 April) in the Turkmen capital of Ashgabat, a multilateral meeting will be held for this matter.
Energy security was one of main discussion topics in Baku forum. Bulgarian President Rosen Plevneliev, Macedonia’s (FYROM) President Ǵorge Ivanov, and former Serbian Prime Minister Mirko Svetkovich shared their views of importance of SGC.
The Southern Gas Corridor is of strategic importance for the EU and especially for Bulgaria and South East Europe, said President Plevneliev.
Bulgaria will build its Interconnector Greece-Bulgaria to connect with the Trans Adriatic Pipeline which will transport Azerbaijani gas to Europe.
“We have a purchase contract for more than one billion cubic meters of gas per year from SOCAR,” the Bulgarian President said, adding that Bulgaria hopes “to activate it sooner.”
Serbia does not have enough energy resources to meet the nation’s consumption, said its former Prime Minister Svetkovich.
Expressing his disappointment with Russia’s decision to cancel the South Stream project, Svetkovich said his country is looking at other options for receiving gas.
"In Serbia, gas production is only 15 per cent of total consumption; we import the bulk of needed energy resources. We have the only sources of gas supply from Russia, which is delivered to us via Hungary. Serbia built a gas storage, but, nevertheless, the situation is not so favorable. Signing the agreement with Russia for gas supply via South Stream we hoped that we secure our future. Unfortunately, the project is not existed any more. Now we considering of the diversification of supply sources and projects, but this requires time, " said Svetkovich.
Not only former officials but also the current Serbian government considers Azerbaijan and the SGC as alternative sources for energy supply.
The issue was discussed recently during the mid-April official visit to Baku of Serbian Prime Minister Aleksandar Vucic.
At the meetings, a SOCAR agreement was reached for setting up a commission that will look into the possibilities of supplying gas to Serbia from Azerbaijan.
Prime Minister Vucic said it is very important that Serbia is attempting to connect to SCG, that will help the country diversify its supply sources.
Technically it will be possible with the construction of a Bulgaria - Serbia (IBS) interconnector. It is a project which includes the construction of a 150km long pipeline, which will connect the gas transmission networks of the two countries. The pipeline will run between Nis in Serbia to Dupnitsa, located near Bulgaria's capital city of Sofia.
Macedonia also expressed its interest to connect to TAP, that will allow it to diversify energy sources and improve energy security.
According to President Ǵorge Ivanov, the Republic of Macedonia intends to join TAP. “We have not received a proposal on joining TAP yet. However, we intend to join this project”, Ivanov told to reporters in Baku, adding that the issue will be discussed during official visit to Macedonia of President Ilham Aliyev, whom he invited during their meeting in Baku.
Azerbaijan is welcoming the of expansion SCG in Europe, and more precisely, the Balkans.
"In the coming years, I am sure that the countries of the Balkan region will join our pipeline system. Especially since the interconnectors are being built, which we fully support, because Azerbaijan has enormous, huge gas reserves, infrastructure, which is already in the process of construction," the President Aliyev said in his speech at the Baku forum.
The European segment of SGC – TAP always pointed out that the pipeline’s routing can facilitate gas supply to several South Eastern European countries, including Bulgaria, Albania, Bosnia and Herzegovina, Montenegro, Croatia and others.
AEI Updates May 2015Posted by Adv. Lorenc Gordani, PhD Wed, May 06, 2015 23:13:46
TANAP participants to consider attracting new shareholders
4 MAY 2015
Baku, Azerbaijan, May 4
Participants of the Trans Anatolian gas pipeline project will hold talks with prospective new shareholders of this project, a Turkish minister said.
Taner Yildiz, Turkish minister of energy and natural resources said that currently, two companies are interested in becoming TANAP shareholders, Anadolu agency reported May 4.
The TANAP project envisages the transportation of gas of Azerbaijan’s Shah Deniz field from the Georgian-Turkish border to the western borders of Turkey.
TANAP’s initial capacity is expected to reach 16 billion cubic meters of gas per year. Around six billion cubic meters of this gas will be delivered to Turkey and the rest of the volume to Europe.
Turkey will obtain gas in 2018. The gas will be supplied to Europe in early 2020 after the Trans Adriatic Pipeline (TAP) is constructed.
BP and the TANAP consortium signed March 13 a shareholder agreement, according to which BP will become one of the shareholders of TANAP. The agreement is one of the main documents for BP’s ownership of a stake in the TANAP project.
Following the completion of a legal implementation procedure, TANAP’s shareholders list will be as follows: SOCAR – 58 percent, Botas – 30 percent and BP – 12 percent.
The project’s cost is estimated at $10-$11 billion.
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AEI Updates May 2015Posted by Adv. Lorenc Gordani, PhD Tue, May 05, 2015 15:57:02
All about Albania
With the Pope planning a visit to the once cut-off country, Tim Adler
samples its eccentricities first hand
Updated: 17:00, 18 June 2014
Stride along the seafront at Durrës, a
seaside town an hour from the capital Tirana, and as you look up at hot peach
and lime green hotels and apartment blocks you could be in a jolly cross
between Blackpool and Miami. But then everything in Albania is a clash between
something, which is what makes the country so hard to define. “Even for us it’s
hard sometimes,” one Albanian told me. After all, what did I know about Albania
before coming here — other than that Pope Francis is gracing the nation with a
visit in September?
A Communist country so isolated for nearly 50 years
that it became the North Korea of Europe, Albania was pustulated with concrete
defence bunkers for an invasion which never came. Not only did it turn its back
on the West but it also fell out with neighbouring Yugoslavia, and even the
Soviet Union, which it accused of not being Communist enough. At one point, the
secret police kept a quarter of the population under surveillance.
My apprehension before boarding the flight for a weekend
getaway to Tirana only increased when the bureau de change warned me not to use
my credit card at an ATM or even a bank because the details would be stolen.
The man on the plane next to me confided that he always carried his money in
Driving into Tirana, however, the crazily painted
buildings — some of them psychedelic camouflage, others bold Mondrian squares —
immediately cheered me up. Prime minister Edi Rama encouraged residents to
repaint their drab Communist-era blocs when he was mayor, calling the campaign
“Give Me the Colours”.
Tirana itself could be any Western city — except for the
prices, which are half those at home — with all the noise and chaos that
implies. Almost one-third of Albania’s population lives in the capital, which
is reflected in the traffic jams. “There was no traffic before there were women
drivers,” grunted my driver.
I was dropped off at the Kotoni Hotel, a boutique
establishment which used to be the Foreign Ministry but reopened three years
ago. It was built by the Kotoni family in the Thirties and they still run the
business. My bedroom was a Fifties-style room with an agreeable whiff of
Castro’s Havana, while the bathroom featured a pulsating walk-in shower with
room enough for two.
Tirana is now a vibrantly young city. The average age of
inhabitants is around 30 because of a baby boom during the last gasp of
Communism in the early Eighties. Its isolation has allowed Albania to develop a
delightfully topsy-turvy culture. Albanians shake their head when they mean
yes; the Albanian alphabet has 36 letters; and it has the world’s only 3½G
What’s nice about Tirana is that the multinationals, the
Starbucks and McDonalds, have not yet turned the city into everywhere else. Not
that brands don’t exist in Tirana, just in ways which would give their company
lawyer a heart attack: H&M, Armani and Disneey (note spelling) all
apparently have stores in Tirana, just little shops selling tat.
The city centre is small and you can stroll around it in a
morning, with its government buildings and the former Soviet embassy turned
into the presidential palace. One starkly modern building that looks as if the
Millennium Falcon has crash-landed next to the PM’s office was originally a
museum dedicated to Enver Hoxha, the dictator who ruled for 41 years until his
death in 1985. Known as the Pyramid, it opened and closed within three years.
Locals are still unsure what to do with it.
Just down from the Pyramid is the National Gallery of Arts.
Be warned, the bulk of the national collection is ghastly super-heroic Social
Realist art from Communist times. Ignore the vaguely Tom of Finland paintings
showing aviators standing around in leather chaps, and head straight for
the work of Sofia Papadhimitri on the first floor. Working in Tirana in the
Thirties, she is a world-class painter who makes Lucian Freud look amateurish.
One piece in particular, that of an Albanian woman looking as pleased as punch,
has the hallucinatory quality of a Vermeer. For the evening,
Tirana’s coolest bars and clubs are in an area known as the Block, a
cordoned-off grid of streets where the Politburo lived; nobody went in or out
unless they were Party faithful. Radio is a bar which wouldn’t look out of
place in Hoxton, decorated with Communist-era wirelesses and old washing
machine drums used as lampshades.
Take a taxi out of the city centre to Sofra e Ariut,
probably the finest traditional restaurant in the city, where the waiters don
Albanian national costume. Albanian food is delicious, a cross between Turkish
mezze and Greek, as you might expect. Hors d’oeuvres include an amazing
flambéed cheese dish called Kackavall Fure, which is brought to your table and
set alight. I was disconcerted to see a photo of Cherie Blair — the
Blairs apparently advise Albania’s new prime minister.
Even more alarming was coming across a statue of George W
Bush on the drive to Kruje, birthplace of national hero Skanderbeg. I had come
to visit the lovely medieval bazaar and a traditional Ottoman house, which has
been kept as it was during the 19th century. After an hour of inspecting
Albanian farm tools, I could feel my enthusiasm wane as my guide enthused over
16th-century Albanian olive oil production.
Albanians love America just as they love gambling and, for
some reason, shoes. They cheerfully admit to being corrupt and lazy, while
being intensely serious about politics. Another contradiction. The entire
country is delightfully eccentric, which makes it feel rather British in some
ways. By the end of my weekend, all my apprehensions about Albania had been
In fact, the only stereotypical moment came on the way back
to the airport when the car I was in juddered to a halt. Somebody had stolen
all the petrol.
Regent Holidays has four nights in Tirana at the
four-star Hotel Kotoni from £999pp B&B, including one dinner with
wine, all private transfers, a city tour of Tirana and a one-day
excursion to Kruje and Durrës with return flights with British Airways, regent-holidays.co.uk.