Signed, sealed and delivered: Q&A with CEO N. Desmond Smith on Pennine's path forward into Albania (Part 2)
With signatures, handshakes and government seals, Pennine Petroleum Corporation officially began preparing in mid-February for its entry into the Albanian energy landscape.
On Feb. 14, in the Albanian capital of Tirana, Pennine chairman Richard Wadsworth, CEO N. Desmond Smith and director Jeff Saxinger signed off on a finalized Production Sharing Agreement (PSA) with Albpetrol Sh.A. for the exploration and development of Albania’s Velca Block.
Pennine’s leadership has been eagerly awaiting finalization of this PSA, following the announcement back in December 2015 that the Calgary-based company had emerged as the successful bidder for the Velca Block, located 10 kilometers southeast of the city of Vlore in southern Albania.
What does this now mean for Pennine shareholders? In Part 2 of our Signed, Sealed and Delivered Q&A series, Mr. Smith sheds some light on Pennine’s path forward—in a country rich with natural resource promise.
Q: What sort of oil and gas transportation infrastructure already exists in Albania? How, specifically, could it help in expediting development of the Velca Block?
A: The area is well supplied with transport infrastructure in gravel and paved roads. The production can be delivered to refineries in Elbasan or Ballsh, the 100 megawatt (MW) power station in Vlore, or the export facility at Vlore. During our most recent trip in mid-February, Pennine director Jeff Saxinger and I visited all these sites, and all parties were excited for Pennine crude oil production to get underway. (Stay tuned for the next edition of Paydirt, which will contain a detailed report on Pennine’s potential customer base.)
Q: What plans does Pennine have in the way of local workforce engagement and community investment?
A: As Pennine is working in Albania, a subsidiary branch office will be established, and we shall require local experts in accounting and tax. One of the reasons for Pennine’s recent change of auditors to EY is their strong presence in-country, and their experience in dealing with domestic and foreign entities. We shall be working closely with the established expertise of Albpetrol’s geoscientists and engineers, and the computing strength and experience of the folks here in Calgary. When the decision to drill is made, tenders to those currently operating in Albania and the Balkans will be made, and supplemented with the best the industry has to offer—oil knows no political boundaries. That being said, we shall employ and liaise with many Albanians who will make the venture a success.
Q: Will Pennine be active in further Albanian exploration opportunities?
A: Now that the Velca Block PSA is a fait accompli, Pennine can look to expanding our interests. The primary focus will be producing fields that will benefit from our low-cost, high-technology approach to developing the vast resources of Albanian hydrocarbons.
(ICYMI: In Part 1 of our Signed, Sealed and Delivered Q&A series, Mr. Smith discussed Velca Block seismic data, potential drill sites, and the region’s track record for crude oil production.)