Establishment of Tirana branch office an important milestone in Pennine’s evolution
In folklore, Albania is known as the Land of the Eagles, with the two-headed bird on the national flag representing the north and the south.
Pennine Petroleum Corporation, too, is looking in both of those directions as it continues building a presence in the Balkan nation.
While Albania’s national government works through the final regulatory stages of Pennine’s Production Sharing Agreement (PSA) for the Velca Block, in the south, Pennine has also established a PNN legal entity branch office in the north, in the capital of Tirana.
In this issue of Paydirt, Pennine’s Chief Executive Officer N. Desmond Smith answers some questions about PNN’s Tirana branch office and its importance to the company’s overall direction.
Q: When do you expect your Tirana branch office to open?
A: The office was officially registered to do business in Albania on June 14, 2017. We have engaged a law firm to assist in this, while also liaising with Albanian government authorities in conjunction with our auditors EY.
Q: How many staff do you expect to be in place upon opening?
A: We will start with most of the technical work being done by Canadian consultants, who are world experts in overthrust analysis of carbonate plates, such as the Pincher Creek and Waterton fields. We’ll also employ basic administrative staff, such as a controller and an office manager.
Q: While Calgary still serves as Pennine’s head office, how much time do you expect Pennine’s leadership to spend in Tirana once the office opens?
A: We anticipate that we will have Pennine’s Canadian personnel in Albania monthly to initiate collection of geological and geophysical data, discuss progress with our joint operating committee, and continue working with government authorities to set up acceptable reporting procedures and the like.
Q: You see this as much more than a symbolic gesture. What operations will your Tirana office be controlling or managing?
A: Our plan is to have all capital and operating expenses managed from our Albanian offices. While the Velca Block’s Production Sharing Agreement (PSA) does provide an allowance for “head office” expenditures, we do not want to see a repeat of some distasteful conflicts that have occurred with Albanian authorities on questionable expenses claimed as “cost recoverable.”
Q: How long has this been in the works, and why do you see it as an important milestone in PNN’s ongoing evolution?
A: We’ve been establishing these administrative and data collection activities since the PSA was signed on Feb. 14, 2017. We understand that the Albanian election campaign, voting and assignment of various government ministries—a process that basically ran from April through the end of September—have frustrated our shareholders. The new Minister of the renamed Ministry of Infrastructure and Energy is the same as the prior Ministry of Industry and Energy; the difference is the expanded role of infrastructure responsibilities for the whole of Albania. While it seems like we are pushing rope at times, the government is working through the final stages of our Velca Block PSA.