Pennine Petroleum has signed a production sharing agreement (PSA) with Albpetrol to explore and develop Velca Block in Albania.
The PSA covers the licence agreement signed by Pennine, Albania’s Ministry of Energy and Industry and Albpetrol for a six-year exploratory lease, which is convertible to a 25-year production lease after discovery of oil and natural gas locations.
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Pennine CEO N. Desmond Smith said: “This is a very exciting day for Pennine. Albania has a long history of oil and gas development dating back nearly a century, and Pennine is excited to bring its expertise to this region.”
Smith also added: “Albania has mature energy infrastructure, established legislation and regulations, and a recent history of significant foreign investment for the development of its energy sector.
“We look forward to working in the Republic of Albania, providing value to Pennine shareholders, and bringing prosperity to the people of Albania.”
Pennine has plans to start a technical report in the next 60 days and identify potential drilling targets based on available data.
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By GlobalDataPennine is currently working with the advisory committee formed by industry experts of Albpetrol and the Ministry of Energy and Industry.
Pennine chairman Richard Wadsworth said: “Our understanding and experience with Albania has enabled us to develop a partnership with the Albanian government and Albpetrol through a new production sharing agreement.
“We believe this agreement provides a balanced risk-and-reward contract for the exploration and development of the Velca Block, and, we hope, many other opportunities in Albania.”
The PSA sets out the details about the exploration phase and a drilling phase.
Under the exploration phase, Pennine and Albpetrol will analyse all available geological, geophysical and well data of the Velca Block and evaluate the data to determine the drilling targets.
In the drilling phase, both parties will drill a minimum of two wells to a minimum depth of 2,500m.
