The international energy company Shell has officially decided to halt its operations in Albania, announcing a complete withdrawal from Block 4 oil exploration in the southern region. This decision, detailed in the company’s 2023 audited financial statements, confirms that Shell has no intention of continuing its business in Albania in the foreseeable future.
Reasons for Withdrawal and Financial Impact
Shell Albania Block 4 B.V. was responsible for exploration in the area, an initiative approved by the Council of Ministers in June 2018. The exploration agreement included three phases, but due to market instability and the COVID-19 pandemic, Shell suspended exploration in 2022 for a two-year period.
However, in 2023, the company decided not to enter the second phase of exploration, opting instead for a complete withdrawal from Albania. The company has accumulated losses of approximately €25 million, primarily due to significant expenses related to oil exploration.
Challenges in the Shpirag Region
A similar situation has occurred in Shell Upstream Albania B.V., which oversees major oil exploration operations, especially in the Shpirag region.
- The company reported record losses of €1.1 billion following the devaluation of oil wells that failed to yield sustainable commercial results.
- Testing at Shpirag-5 well was completed in early 2024, but the results were insufficient to justify further development.
- In 2023, the company recorded pre-tax losses of 54.8 billion ALL (€480 million), raising concerns about its continued presence in Albania.
Shell’s Final Exit Strategy
Following the disappointing results at Shpirag-5, Shell Upstream Albania is no longer considered a viable ongoing operation, increasing expectations of a full withdrawal from the country.
The company stated that it is still evaluating options for Block 2-3, but financial obligations will now be handled by Shell Treasury in London, signaling a gradual exit from the Albanian market.
This decision officially ends Shell’s involvement in Albania’s oil extraction projects, dashing hopes of exploiting potential reserves in Shpirag.