Marginal revenues from Albania’s oil and mining

Albania’s Extractive Industries Transparency Initiative (ALBEITI) published its second EITI Report, revealing that in 2010 the government received just under US$ 50 million in taxes and other payments from its oil and mining sectors. While Albania has rich deposits of oil, nickel, chromite and copper, the Western Balkan country has to date not seen any significant revenues from extraction.

According to the EITI Report, published on 26 December 2012, the oil sector is still a small contributor to Albania’s economy. Taxes, fees and royalties from the oil sector amounted to just 1% of the government’s total revenues for 2010. A majority (54%) stems from the government's direct share in crude oil produced, followed by royalties (42%) that are paid as a set percentage on all revenue, without regard to profits or revenues to the operator.

The mining sector is even more marginal with yields only representing 0.2% of Albania’s fiscal revenues in 2010. However, there has been an increase from 0.07% in 2009 according to that year’s EITI Report. The sector is still characterised by a large number of small-scale operators scattered across the country. While about 800 permits have been granted to mining companies, the six large industrial operators make up 40% of the sector’s payments. Most fiscal payments from the mining sector in 2010 came from royalties.

Net discrepancies between payments and revenues amount to 2.1% in the oil sector and 0.4% in the mining sector.

In 2010 Albania received USD 17 per capita from taxing oil and mining companies in the country with a population that has dropped below 3 million.

Albania has until 25 April 2013 to complete its second EITI validation, the quality assurance mechanism checking a country’s compliance to the EITI Standard.