Albanian PM says Shell to invest up to €7bn in Shpirag

Oil and gas major Shell is planning to invest up to €7bn in Albania’s Shpirag area if the results of upcoming tests are positive, Prime Minister Edi Rama announced on August 23. 

According to Rama, preliminary analyses have shown that the oil found at Shpirag is of very high quality. This potentially paves the way for a scale of investment that would be game changing for Albania, currently one of the poorest countries in Europe. 

The existence of the Shpirag deposit was confirmed back in 2013 with the successful drilling of the Shpirag-2 well, which revealed the presence of a significant light oil column in the reservoir, spanning at least 800 metres, Shell said at the time.

Rama said that the oil discovered at Shpirag, close to the city of Berat, is the same quality as that extracted in Saudi Arabia. 

Oil deposits previously exploited in Albania have been heavy oil, such as that used for bitumen, which is less valuable and cannot be used in vehicles.

Speaking at a press conference alongside Energy and Infrastructure Minister Belinda Balluku, Rama said the exploration work over a 10-year period had been technically challenging, but is now on the verge of final testing to assess the pressure stability of the gas and oil flow that can extracted. 

Rama also talked of the plans once oil starts flowing. The investments to develop the deposit will include infrastructure for extraction and refining of the oil, which will create the basis for new industries in Albania. 

Tirana has also been working for around a year on plans to set up a sovereign fund, modelled on those in other countries with abundant natural resources. 

“Every Albanian must be convinced that this great wealth is his and this great wealth will be a support for everyone … the economic and financial benefit from this wealth will impact pensions, it will impact the balance of payments of the Republic of Albania without question, it will impact, it is not discussed, the education system, the health system and it will impact the well-being of our children,” Rama said.