Investing in Albania s Hydrocarbon Resources

Transcription

1 Investing in Albania s Hydrocarbon Resources US-Albania Investment Forum New York, September 19, 2011 Dr. Sotirios Kapotas Stream Oil & Gas Ltd

2 Agenda Albanian Hydrocarbon (HC) sector Stream investment in the Albanian HC Use of indigenous Albanian HC resources 2

3 Oil & Gas Sector in Albania 1918: Oil first discovered in Albania 1989: Albania net exporter of petroleum products 2001: Albania importing ~75% of its needs 1990s: Efforts made to attract foreign capital & technology 1994: foreign investment law enacted to attract and protect foreign investment Albania attracted susbtantial foreign investment in the hydrocarbon sector over last decade 4,666 oil wells drilled to date HYDROCARBON RESERVE POTENTIAL Over 10 billion barrels of oil in place Over 1 Tcf of gas in place 3

4 Albania Hydrocarbon Advantage Stable European country NATO member, anticipates joining the EU Government policy focused on privatization of the hydrocarbon sector Constrained development to date Outdated technology, extremely limited investment Well defined, large petroleum reservoirs High regional market demand Excellent fiscal terms 100% WI, 25+5yr term,100% cost recovery Reasonable capital commitments Local experienced workforce Ability to export 100% of production Current Producers: Bankers Petroleum, Stream Oil & Gas, Albpetrol Sh.a 4

5 Stream Oil & Gas in Albania Canadian based emerging oil & gas production, development, and exploration company Focused on the re-activation and redevelopment of its currently producing projects: three on-shore heavy oil fields, Cakran-Mollaj, Ballsh-Hekal and Gorisht-Kocul one onshore producing gas field, Delvina with large gas upside exploration Operates under petroleum agreements and 25-year license agreements Led by a technically experienced management team Implementing modern & enhanced recovery techniques for carbonate reservoirs Delvina Base Camp staff Fier operations office 5

6 Stream Oil & Gas Operations Defined reservoirs 3 heavy oil fields 1 natural gas field Oil ~ API Gas with NGLs of ~100bbl/MMCF Potential multiple production increase by secondary & EOR techniques Additional Oil & Gas drilling Gas Exploration Crude oil market Power generation market 6

7 bopd $MM Investment vs Growth $18.0 $16.0 $14.0 $ $10.0 $ $ $4.0 $ $ Q Revenue Net Operating Income Expenditures Net Production 7

8 Hydrocarbon Market LOCAL CRUDE DEMAND - Existing refinery - Plans for new refinery S. EUROPE CRUDE DEMAND - Italy - Balkans POWER GENERATION -Thermal options 8

9 Electricity Sector in Albania All production based in Hydroelectricity (2008) Albania has been a net importer since 1998 Electricity consumption steadily growing ~20% since % Albania's Electricity sector - [2008] Imported Production Peak load in 2008 represents 97% of installed capacity it is considered of great importance the construction of new generation sources by 2009 (ERE 2008 report ) Developments based on small Hydro Power plants with a clear pricing mechanism Albania is extremely depended on hydropower More capacity is needed to balance the power production in the country & to to backup hydro production during dry periods Thermal generation seems to be the solution Import of fossile fuels has a substantial negative impact on generation costs 37 % 9

10 Use of Indigenous HC Resources for Power Generation Advantages: [ /MWh] 100 Domestic production of electricity 80 (600 MW potential identified today) 60 Reduction of electricity import bill 40 (2008 ~ ) 20 Backup for Hydropower 0 Competitive pricing Additional revenue to the Government from Oil & Gas sector 50% tax on IOR Production in the Southern region of Albania (eg. Delvina) Export potential to Balkans Use of high efficiency technology in compliance with WB environmental guidelines Evolution of Electricity Import Prices

11 Current situation Significant Gas Resources Delvina Case Very limited Gas off take Minimal utilization of the resources Stream s Strategy 1. Invest in the development of the field 2. Invest in a Power Plant with a partner 3. Sell Electricity Developer Possibility of developing a gas field + Sales of electricity (~150 MW) Albania Use of domestic Hydrocarbon resources + Additional Tax income from Oil&Gas production + Tax income from Electricity Production + Reduce dependence on import of energy Win Situation Win 11

12 Committed to Albania 12