Terms of the P.S.A. Agreement for the Albania Free Exploration Blocks, Lorenc Gordani | Monday, June 22, 2015AEI Updates June 2015Posted by Adv. Lorenc Gordani, PhD Mon, June 22, 2015 14:46:58
Terms of the P.S.A. Agreement for the Albania Free Exploration Blocks
Note by Lorenc Gordani | Monday, June 22, 2015
The Albania Ministry of Energy and Industry, has announced the opening of available Areas 4, 5 and Dumre, C and Panaja with deadline of application 15.07.2015. Meanwhile for the onshore and other offshore Areas, due to the consolidation of seismic data, to a postponed period. The "Petroleum Law", No. 7746, date 28.07.1993, authorizes the Ministry to enter into a Production Sharing Agreement (PSA), for exploration, development PSA based on the following Terms of the Agreement.
The duration of the exploration period is up to 5 years and can be extended up to 7 years in conformity with the "Petroleum Law". The exploration period is divided in three phases, with work obligations and financial commitments for each of them. The contractor may not pass to the subsequent phase without completion of work obligations and financial commitments. The duration of each phase of Exploration Period is subject to negotiations.
In case of a commercial discovery, the period for development and production of the area shall be twenty-five years and can be further extended as provided for in the “Petroleum Law". These obligations will be defined by the Contractor in its application to AKBN and are subject to negotiations before entering the agreement.
The applicant must submit in the application process details of the offering fee for training and administration Funds and may be subject of further negotiations. The terms for cost recovery and petroleum sharing will be specified by the contractor in its application, subject to negotiations with AKBN before the signing of the Agreement.
The Contractor shall have the right to receive and retain abroad the proceeds from its export sales to the extent that they are not required to meet on a current basis its local currency costs in Albania. The Contractor shall have the right to convert foreign currency into local currency at the generally applicable rate of exchange for commercial transactions.
Under the Petroleum Sharing Contract the Bonus is payable in various stages, including the signature bonus. The production bonus and the signature bonus per square kilometre are subject to negotiations.