A Canadian firm that has invested millions in Albania's oil sector now promises to turn the country into an "upgraded oil exporter".

A Canadian firm that has invested millions in Albania's oil sector now promises to turn the country into an "upgraded oil exporter".

The privatisation of Albania's oil refinery company, ARMO, has drawn considerable interest from the Canadian company Bankers Petroleum. The tender announcement -- in the works since 2003 -- is expected next year.

Art Agolli, the Canadian firm's business development manager, says that if it wins the tender, Bankers Petroleum will "revamp the refinery and turn Albania into an upgraded oil exporter".

ARMO owns the sole oil refinery in the country, and produces about 100,000 tonnes of diesel and benzene annually. It meets about 30% of oil consumption needs in the country. However, it is heavily subsidised and does not pay market value for oil. Based in Ballsh and Fier, ARMO was established with now outdated Soviet and Chinese technology, and its products do not meet EU standards.

Bankers Petroleum entered Albania's oil production sector in May 2004. It signed a 25-year agreement to operate in Patos-Marinza field, the largest on-shore heavy oil field in Europe. At the time, production there had fallen to 600 barrels of oil per day, but has since grown nearly tenfold.

"As a result of synergies between the field and the upgrades, the Patos-Marinza field could do as much as 40,000 [barrels of oil per day]", Agolli says. The company has invested between $70m and $80m. If its plans for expansion are approved, the investment is set to grow, making it one of the largest foreign investors in Albania.

There are about 600 wells at Patos-Marinza, with Bankers running about 220. The rest are operated by the state oil company, Albpetrol. Under its agreement with the state, Bankers plans to operate all the wells eventually. The company trucks its oil to the port of Vlora, where it is then shipped to Italy for refining.

"It is a challenge to deal with changing governments, but the business environment is good and getting better. Infrastructure and environmental issues remain a big concern for us," Agolli says. As the company takes over the wells, it upgrades them and applies international environmental standards.

By 2008, Bankers hopes to be at 10,000 barrels of oil per day, operating an additional 130 wells annually. (SETimes)