Albania and Shell drop plans to drill for oil in protected area

By bne IntelliNews January 27, 2019

The Albanian government and the local subsidiary of Royal Dutch Shell have dropped plans to search for oil in a protected area in the southern Albanian region of Gjirokaster as part of drillings in Block 4.

The decision was made following protests over environmental concerns.

Albania's energy and infrastructure ministry signed an oil exploration agreement with Shell Upstream Albania for Block 4 in the southern mountain of Shpiragu in February 2018, where it plans to invest $42.5mn in a period of seven years.

Block 4 includes the area between Saranda and Gjirokaster. Shell is also engaged in exploration of gas and oil in Block 2 and Block 3 in Albania.

“Despite the positive results of the study in the Block 4, Shell will nod conduct drilling activities in Zagoria protected subzone, which enjoys special protection,” Albanian Daily News reported on January 25, citing director of Shell Upstream Albania, Rohan D’Souza.

The Zagoria region is a national park with a unique ecosystem and rare animals.

Prime Minister Edi Rama confirmed in a tweet that the drilling will not be conducted in that area.

On January 23 Rama also said that there are indications for huge gas and oil reserves in the Shpiragu area near the southern city of Berat.

“If tests are positive the impact on the economy will be great starting from 2020,” Rama said.

It is estimated that Albania has oil reserves of 220mn barrels and 5.7bn cubic metres of natural gas.

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