Synergy, energy and Albanian prosperity: Q&A with new Pennine director Harry Sargeant IV
It’s an alliance in energy, and it’s predicated on synergy.
Earlier this month, Pennine Petroleum Corporation (TSX-V: PNN) announced that Harry Sargeant IV, Vice President of Global Oil Management Group (GOMG), had joined its Board of Directors.
Global Oil Management Group, based in Boca Raton, FL, is an international oil corporation owned and led by Mr. Sargeant’s father Harry Sargeant III, an American energy and shipping magnate and former United States Marine Corps fighter pilot.
Global Oil Management’s Albanian subsidiary, Ionian Refining and Trading Company (IRTC), was established in Tirana in 2016, and has an ownership stake in the Ballsh and Fier refineries in southern Albania.
So what’s the connection with Pennine? Read our Q&A to find out.
Q: Why did you choose to join Pennine’s Board of Directors?
A: I believe that there are numerous synergies at play here.
First of all, the Velca Block concession, on which Pennine will be drilling, is close to the refineries in Ballsh and Fier. Secondly, we expect that the Velca Block will produce medium to light oil, which will aid our refining economies by producing a more valuable product slate. Thirdly, there is the local advantage—this oil will be produced right in southern Albania, which means that Albanians will benefit through job creation, tax revenue and economic spinoffs like procurement spending.
We’ve discovered, as we built a relationship with Pennine Petroleum in recent months, that having some involvement in the responsible development of the Velca Block is beneficial to our business model.
And, as I said, everyone prospers.
Q: What are Global Oil Management Group’s plans for the region, and how could Pennine potentially be involved?
A: Global Oil Management Group and IRTC are here in Albania to help revitalize the country’s refinery system—and that includes refurbishing the refineries in Fier and Ballsh.
For many years, these refineries have processed the heavy oil that comes from the Patos-Marinza oilfield developed by Bankers Petroleum. We have found, through our operation of the refineries, that there is a dearth of locally produced crude oil—which makes it almost impossible for our refineries to run at their operational capacity.
This can be attributed to numerous factors, such as lack of capital investment, field degradation, and the macroeconomic environment of the crude market.
The potential for Pennine to produce a light- to medium-density crude oil not only gives our refineries the ability to source much-needed incremental barrels for our refinery runs, but also will help created value-added products derived from the lighter crudes.
Pennine’s product is more economical, and it’s derived locally.
Q: Can you take on feedstock from Pennine at this time?
A: Yes, that’s definitely another synergy. The Ballsh refinery has a capacity of about 19,500 barrels per day, but it’s currently running at only 60% of its operational capacity. The Fier refinery, which we’ve been operating through IRTC’s past affiliates for about three years, can handle about 9,000 barrels a day, but it’s not currently running due to the scarcity of crude in the local market.
So we can certainly handle Pennine’s Velca Block production when it comes online.
Q: Are there any “value-add” propositions at play?
A: We believe that the excellent relationship that Pennine’s leadership has carefully cultivated with the Albanian government can only benefit this equation.
We also believe that Pennine has the technical experience—or the geology chops, if you want to put it another way—with thrust-belt tectonic reservoirs to develop the medium-to-light-oil potential of the Velca Block.
Q: What does your experience tell you about IRTC’s Albanian prospects?
A: We established a presence in Albania because we believe there is a great opportunity to increase operating efficiencies, optimize product yields, and ultimately position IRTC as the highest-margin refiner in southeastern Europe.
We believe that the relationship we’ve forged with Pennine will help us get there.