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ALBANIA: Corruption Leads to Albpetrol Privatization Annulment

Bottom Line: The sale of Albania’s state-owned oil company Albpetrol to a consortium led by Albanian tycoon Rezart Taci has been invalidated after the consortium failed to come up with the down payment. A new tender is expected shortly after June elections. The sale of Albpetrol to Taci would not have been advantageous to the junior foreign companies who have built up the country’s oil industry over the past years. A new tender could set the stage for earlier bidders, like Canadian-run Bankers Petroleum, to try again.

Analysis: On 8 February, the Albanian government invalidated the winning bid by Vetro Energy for Albpetrol after waiting two months for the consortium to come up with the down payment of €170 million (20% of its bid). The Chicago-based Vetro Energy bid €850 million through the Singapore-registered Vetro Silk Road Equity consortium. This was more than twice the next-highest bid from Chinese consortium Win Business Petroleum (€297 million), and three times the third-placed offer from Bankers Petroleum of Canada.

Initially, the government was considering the second highest bidder, but this was abandoned due to the fact that under the tender rules the bids had expired.

This deal has been an embarrassment for the Albanian government, which will face new elections on 23 June. The country is hoping to convince the European Union that it has made significant progress in fighting corruption. To that end, the Albpetrol…

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