Sunday, October 22, 2006

International Oil Companies Drawn to Untapped Oil Riches in Macedonia

Norwegian, Turkish and Kazakh oil and gas companies plan to come to Macedonia to see just how much oil is bubbling under the surface at the untapped Engilija field near Sveti Nikole in the east of the country, reported Skopje daily Vreme on October 21.

Although it has been known since at least the 1960’s that the flat, soft area known as Ovcho Pole (Shepherd’s Plain) contained some amount of natural resources, no one knows exactly how much. In Yugoslav days, a company from Novi Sad in northern Serbia, Nafta Gas bored into the earth near the village Ergelija, registering positive for oil and gas. After the discovery, however, work mysteriously stopped for reasons still unknown, and until the present day no one really knows how much oil Macedonia might be sitting on. A few months ago, the economics weekly Kapital caused a brief sensation with a lengthy article discussing the issue.

According to Vreme, new Minister for Foreign Investment, and former Vice-President for Publicity and Marketing of the AMBO oil pipeline project, Gligor Tashkovich is in touch with the heads “of some big world’s energy companies” over the resumption of oil exploration in eastern Macedonia. The new government has rated development of the energy sector as among its top priorities for the economic development of the country.

At the moment, the biggest interest in Ergelija has come from Kazakhstan oil giant Kazmunaygaz, reports Vreme, adding that Tashkovich is also speaking with a Norwegian oil company and relevant officials in the Norwegian government.

However, in May 2006, the Macedonian web portal Total had reported that the ex-Minister of Economy, Besnik Fetai and Richard Wordsworth, president and manager of Bankers Petroleum signed a memorandum for cooperation for the Ergelija exploration. Bankers Petroleum already has a presence in the Balkans, working on oil fields in Albania. “Our strategic interest is to be present in this region. Because the investigations from the past have given some positive indications, we decided to sign the memorandum for cooperation with the Ministry of Economy. We wish to expand our activities in the region. Macedonia offers solid possibilities in that respect,” said Wordsworth at the time..

This previous announcement was however not mentioned by Vreme, leaving it unclear as to what became of the deal. Tashkovich also recently visited Kazakhstan, deemed a desired investor for Macedonia on the domestic energy sector. Some of their companies are already interested in the Macedonian market, the article adds. However, a preliminary problem to sort out is the need for the two countries to make diplomatic and consular relations. Also, Kazakh and Turkish companies are believed to be among the candidates to transport the oil in the Trans-Balkan gas pipeline, AMBO, reads Vreme.

Should Macedonia suddenly find itself an oil-rich country, it would come as a great boost. According to A1 TV, foreign investments in Macedonia in 2005 fell drastically compared with investments in 2004, leaving the country on the bottom rung compared to other countries in the region. Last year in Macedonia only around $100 million of foreign investment came in, according to a report on world investments published by the UN’s Conference for Trade and Development (UNKTAD).

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