Petroleum and Gas Contracts to Change
Albanian Daily News
Published November 8, 2017
Hydrocarbon contract agreement will change through deputing risk responsibility from the government to contactors, Minister of Infrastructure and Energy, Damian Gjiknuri said at the meeting entitled "Fiscal and contractual framework to develop hydrocarbon sector" in Albania, on Tuesday.
The activity organized by the American Department of State, Bureau of Energy Resources, the American Department of Trade and Treasure, was attended by U.S. Ambassador in Albania, Donald Lu, Minister of Economy Arben Ahmetaj as well as experts of the field.
Minister Gjiknuri said that the government in cooperation with American experts is working to strengthen the Albanian regulatory framework in the field of oil and gas, under the fiscal and environmental control aspects in accordance to the best international experiences.
According to the minister, wherever there is oil and gas there are discrepancies between state and private contractors, but the current contracts put the investment risk on the state.
"The risk should be passed over to contractors while at present the government might obtain 50% of the profit tax from petroleum companies thus contract models have to be altered based on the best European practices," Gjiknuri said.
"Perhaps these companies have to be taxed just like other businesses, but they themselves bear the risk of investing and the state gets its share," Gjiknuri said.
Albania has great hydrocarbon resources and potentials which the government and the citizens can benefit from however, it is necessary to improve the regulatory and fiscal framework in order to make this profit feasible, minister Gjiknuri said.
The Energy Minister also announced the establishment of the Oil and Gas Institute, which foreign experts considered as one of the key links to be funded and supported. This institution will serve as the best technical capacity to help Albania negotiate with potential contractors.