Albania is rich in natural resources such as oil, gas, wood, bitumen, chrome and copper. The extractive industries have consistently contributed to the national income and development. Albania’s energy sector, which includes hydropower, hydrocarbons and renewables, accounted for 12% of the country’s GDP in 2019.
While state-owned enterprises have dominated Albania’s extractive sector, the government is promoting privatisation to stimulate development and job creation. Domestic and foreign investment in both mining and petroleum have led to the sector’s growth, furthering the need for transparent and accountable management.
Albania has been using the EITI platform to mitigate corruption, improve natural resource governance, implement an open data policy, introduce legal reforms on beneficial ownership, increase transparency in commodity trading and strengthen civil society oversight. Albania’s EITI reporting also covers the hydropower sector which helps to inform debate and planning around the energy transition.
Economic contribution of the extractive industries
- to government revenues
- to GDP
- to exports
- to employment
Albania’s EITI reporting goes beyond the EITI Standard to cover the hydropower sector. Its 2017-2018 Report identified significant power distribution system losses, which Albanian authorities are working to address. Albania EITI intends to build on this work with a scoping study to evaluate other renewable energy technologies, linking to the government’s programme to expand clean energy production.
Albania’s oil and gas sector is mainly governed by the Petroleum Law and accompanying regulatory acts, while the mining sector is governed by the Mining Law and its amendments. Both sectors are mainly regulated by the Ministry of Infrastructure and Energy.
The government receives most of its revenues through a share of production, as well as through bonuses, royalties, profit taxes and from direct investments in the sector. Revenues such as service tariffs and license fees are collected through the State Treasury System (Ministry of Finances and Economy). Albpetrol, the country’s third largest state-owned enterprise, collects a share of oil production and bonuses.
Further information on legislation including links to government sources can be found on the Albania EITI website.
The Albanian petroleum industry has two main systems for awarding contracts: competitive bidding and ad hoc negotiations. The Ministry of Infrastructure and Energy is responsible for granting exploration and production licenses in the mining sector and evaluating applications for petroleum production sharing agreements (PSAs) and concession rights for the hydropower sector. Albpetrol may sub-contract its exploration and production rights to oil and gas companies through petroleum agreements, approved by the Ministry of Infrastructure and Energy.
Albania EITI maintains a concessionaire register for the oil and gas sector and a mining licenses register, both updated semi-annually, based on data released by the MEI and the National Business Center. Production sharing agreements are published in the national gazette, while mining licenses are issued through the National Business Centre. Some contracts are published via resourcecontracts.org.
In July 2020, the Assembly of the Republic of Albania approved Law no. 112/2020, “On the register of Beneficiary Owners”. This law regulates the definition of the beneficiary owner, the obliged entities which must register the beneficial owners, and the creation, functioning and administration of a beneficial ownership register. It also specifies penalties in case of non-registration of beneficial owners.
Additionally, the government approved DCM no. 1088, dated 24 December 2020, “On the determination of the manner and procedures for the registration and publication of the information on beneficial owners, and the notification by the competent state authorities and obliged entities”.
As required by the new law, company participation in beneficial ownership disclosure is required for all domestically registered companies. This information is available in a register administrated by the National Business Centre.
Royalties levied from taxable sales of Albanian oil, gas, and minerals are recorded in the state budget. According to the “Law on National taxes no. 9975, dated 28 July 2008, amended,” 5% of royalty tax collected must be allocated to each local government proportional to their contribution to the domestic output of oil, gas and minerals.
Local governments are responsible for maintaining a list of companies operating in their area, collecting information on royalty payments made to tax and customs agencies, and conducting monthly reconciliation procedures for reporting to the Ministry of Finances and Economy.
According to the 2018 EITI Report, subnational transfers amounted to USD 1.8 million in 2018 and represented the main revenue allocated to the local governments.
Albania EITI is administered by the Albania Multi-Stakeholder Group (MSG). The MSG is hosted by the Ministry of Infrastructure and Energy. It is comprised of 16 representatives from government, industry and civil society.
Multi-stakeholder group is formed
Government announces commitment to join the EITI
2009 EITI Report published
Candidature status renewed
2010 EITI Report published
2011 EITI Report published
2012 EITI Report published
2013-2014 EITI Report published
2015 EITI Report published
2016 EITI Report published
Validation: “meaningful progress”
Validation: “meaningful progress
2017-2018 EITI Report published
Temporarily suspended for missing reporting deadline
Albania achieved a moderate overall score (82 points) in implementing the 2019 EITI Standard in February 2022. The next Validation is expected to commence in July 2025.