The Albanian Council of Ministers approved on 26 February 2020 the new production sharing agreement (PSA) signed by Shell on 2 May 2019 for the Blocks 02 & 03 license. The decision took effect upon its publication in the official gazette (Fletoren zyrtare) of 28 February 2020. The new contact is replacing the original one signed by DWM Petroleum in 2009 and retains the same effective date, i.e. 31 July 2009. Shell is currently in the "evaluation period" related to the Shpiragu discovery, which started on 31 July 2016, at the end of the third exploration period. The evaluation period will last until the start of a 25-year development and production period (extendable for 5 years) depending on the commerciality of the Shpiragu discovery.  As it was the case for PSA signed in the recent years, the contract provides for the allocation of 90% of the revenue to cost recovery in order that the company pays profit taxes since the start of the production phase. The amount of oil that will be allocated to AKBN is based on the level of R factor.  A signature bonus of USD 400,000 was paid by the company including USD 240,000 that will be covered by the digitization by Shell of the historical Albanian seismic data.  DWM Petroleum (a wholly owned subsidiary of Manas Petroleum, now Petromanas) was awarded the Blocks 2 & 3 contract on 8 July 2009. The two blocks were originally covering 1,371 sq km and 1,777 sq km respectively in central Albania. The three exploration periods (3, 2 and 2 years) ended on 6 June 2014, 6 June 2016 and 31 July 2016, respectively. The eastern portion and the northwestern of Block 02 were relinquished in 2014 and the eastern portion of Block 03 was relinquished in 2016 as provided by the contract terms (25% of the contract area to be relinquished when entering a new exploration period). Following the end of the third exploration period, only an evaluation area covering 54% of the original surface remained active.  Shell entered the license in May 2012 Shell with the acquisition of a 50% interest. The company raised its participation in the contract to 75% in June 2013 and finally acquired all the Albanian assets held by Petromanas in March 2016.  The Shpiragu 1/1X discovery was made by Occidental in 2001. Shpiragu 2, drilled by Petromanas and Shell between June 2012 and July 2013, was the first successful appraisal to the discovery. A second appraisal well â Shpiragu 3 â was plugged and abandoned by Shell in December 2017 after failing to reach the reservoir. The well will-be re-entered in Q4 2019. Shpiragu 4 was spudded in January 2018 and confirmed the potential of âsignificant light oil (37Â° API) discoveryâ. 2P reserves related to the Shpiragu discovery are estimated at 136 MMbbl of oil and 580 Bcf of associated gas.  Shell Upstream Albania B.V. holds a 100% interest in the Blocks 2 & 3 license.
oyal Dutch Shell plc - Blocks 02 & 03 - new contract approved by Council of Ministers and gazetted