Balkan nations have high hopes for an oil boom, which they say could provide a much-needed cash infusion and reduce the region's reliance on imports.
Albania is reveling in the recent discovery of massive deposits in its territorial waters in the Adriatic Sea -- a find that could net 1 billion barrels of oil. Serbia, meanwhile, is making plans to extract as much as 400m tonnes of oil shale from its territory, which could result in 600,000 tonnes of oil.
The announcements have some dreaming of new fortunes for the Balkan states, which have traditionally struggled with high unemployment and limited economic prospects.
"I would be very happy if Albania would come to be Balkans' Kuwait," Deputy Minister of Economy and Energy Enno Bozdo told SETimes. He noted that Albania is one of the few countries -- in the region and in Europe -- where huge oil and natural gas reserves have been discovered during the last century.
Albania's discovery came when San Leon Energy, a Dublin based company, signed a contract with the government to provide offshore oil exploration and utilization last year. The company's three-dimensional mapping suggested several large oil and gas prospects.
According to the standard contract that the government uses with foreign companies searching for oil on Albanian territory, the state earns 10% of gross production and 50% of earnings from oil sales, if the utilisation operations are successful.
A top expert on oil and gas in Albania, Professor Gjergji Foto of the Mining-Geology Faculty in Tirana, is optimistic about the prospects.
"We can say that all Albanian territory has bitumen, oil and natural gas apparition on the surface. During communism, we didn't have the proper technology to detect sources. But now, around 400m tonnes of oil have been identified. This huge quantity is waiting for new technological investments. The government should help and be a partner with foreign companies, to have a common goal," Foto, an engineer, told SETimes.
But the government has its detractors.
Mimi Kodheli, vice-chairman of parliament's Economy and Finances Committee, told SETimes that the government should be more responsible for resources of strategic importance, like oil. "The legal framework leaves too much space for foreign investors. For example, they have the right to use sources up to 25 years."
"The Albanian government is not transparent in drafting these deals and doesn't publish procedures. It does not put underground wealth at public service, [rather] uses them for its own interests," she added.
The opposition MP is also critical of government setbacks and bureaucracy that she says keep foreign investors away. "Nobody in Albania has the authority to enter into negotiations with an investor, if he hasn't been at the prime minister's office first. Not to mention other difficulties, like property issue or tax law that has been changed 64 times in the last few years," Kodheli complained.
Bozdo disagreed, saying the government works to attract foreign investors to Albania, and to facilitate their conditions, regardless of the time needed to get environmental permission/license.
Drilling and oil extraction engineer Bashkim Çela, professor at Energy Resources Department at Mining-Geology Faculty in Tirana, is sceptical of news of finding new oil resources in Albania.
"Until 1991, there was no area left for exploration up to 5,000 meters deep on Albanian territory. In my personal experience over the last two decades in offshore and onshore researches, confirms my conviction that these are only demagogy attempts accompanied with budget expenses," Cela told SETimes.
In Serbia, Oliver Dulic, the minister for the environment, mining and spatial planning, said the extraction of oil shale in the mining basin in Aleksinac is a strategic business decision for Serbia's future.
Aleksinac would produce 10% to 15% of Serbia's oil needs, reducing its dependency on imports, he said.
Dulic said scientists are studying the extent of oil shale in the region, and the government is planning to spend 200,000 euros for a consultant to assist with the project.
Some experts, however, are sceptical. If Dulic is correct, the deposit would be larger than those in Estonia, which leads the world in oil shale extraction, getting 200,000 tonnes of oil annually.
SETimes correspondent Biljana Pekusic in Belgrade contributed to this report.
- Social Democracy and Europe's Crisis
- Europe: Surviving a Lost Decade
- Time to Build Bridges Over The Mediterranean
- Greek Unrest the Result of Suppressed Democracy
- Second Bailout May Not be Enough for Greece
- Greece and Germany in War of Words Over Austerity
- Greeks Eager to Repair Tarnished Reputation
- Germany's Role in Europe and the European Debt Crisis
- Greeks Eager to Repair Tarnished Reputation
- Will Any Part of Europe Save Itself?
- Spain: Economic Needs Spur Tensions Between Madrid and the Regions
- Europe Needs a Marshall Plan
- Cold Snap Could Put European Economies in the Deep Freeze
- Russia: Cracks in the Kremlin
- Russia's New Chechnya Problem
- Balkan Countries Dream of Oil Riches
- Europe: Drag on Global Growth
- How Europe's Crisis Could Hurt the Global Economy
- Spain: The Threat
- Russia: Putin Stymies Protesters With Subversion Strategies
- France: Socialism Bombs Out Again
- Europe's Cafe Theater
- What's New in France and Spain for 2012
- Changes Spice Up Northern Europe in 2012
- Will the Euro Survive 2012?
- The Failure of the Euro
- Italian Prime Minister Calls For Unity to Save the Eurozone
- The New Old Europe
- Brussels Agreements Increase German Role in EU
- Council of Europe: The Soft Power Twin
- Greece: Default and Exit
- Greece's Unlawful Immigrants in Dangerous Hands
- Cyprus Gas Discovery Raises Political Stakes
- Politics Return to Russia
- Russians United against United Russia
- 2011 in Review: The World and the Balkans
- The Double Dilemma Facing Weaker National Economies
- German Chancellor Warns Financial Crisis Solution Will Take Years
- Bank of England Warns U.K. Banks that Eurozone Crisis Poses Biggest Threat
- Major Economies Headed for Slowdown
- Is the National Security Complex Too Big to Fail?
- Troubled Spain Elects New Leadership
- What Happens if Italy's Economy Collapses?
- Europe's Crisis and the Radical Right
- Is Europe Over?
- Europe's Crisis: Beyond Finance
- Uncertainty Rises as Eurozone Crisis Deepens
- Balkans: EU Will Help But Countries Must Reform
Distributed via Southeast European Times