“We have ambitious plans for our investment and we see the Albanian government as one of the closest partners to develop our strategy and business”
FIAA: Mr. Sun, this is your first year in Albania and also the first for the Geo-Jade Corporation. Who is GEO-JADE in China and where is your role consisting in the Acquisition of Bankers Petroleum in Albania?
Mr. Xingyun Sun: “Geo-jade Petroleum Corporation” is a company from China which has been expanding its investments remarkably in the last years. It was founded in August 1984 and is one of the first pilot enterprises in Hainan Province to launch public offering of stocks. Geo-jade Petroleum Corporation is foraying into Oil & Gas industry, throughout overseas acquisitions of oil and gas assets. The Company has conducted a strategic transition, which has strengthened the company’s capacity for sustainable development.
Currently in Kazakhstan the company holds 100% equity in both Maten oil company and Kozhan company, which are oil producing operators. Since the establishment, the company has always operated fully in compliance with business laws, as well as honestly and trustworthy. Geo-Jade Petroleum has won the best practice in the Belt & Road award on “2014 China cross-border investment Golden Whistle Award” , the economic cooperation achievement award issued by “Silk Road Fund for Peace” , and has also been awarded the “2016 top 100 enterprises in Hainan Province award” issued by “Federation of Hainan enterprises”.
As regarding to the investment in Balkan region, Bankers Petroleum is one of the most important Chinese investment and its now under the property of Geo-Jade Petroleum. We are very proud of our presence here with Bankers which is the largest taxpayer that represents 5% of Albanian’s GDP. Bankers has invested US$ 2 Billion in Albania, while more will be done by using modern technology and develop further the major asset of the country.
Can you tell us about your Business vision? How do you see Bankers Petroleum Albania evolving under the Geo-Jade brand name? How do you see yourself creating this change?
The new ownership group is developing further the important asset of Patos-Marinza by increasing investments, introducing new techniques and technologies with the support of a very competent and highly effective team in Albania. After the change of ownership, the total focus is now concentrated in Albania and therefore the headquarters of Bankers Petroleum have moved from Calgary (Canada) to Albania allowing to be faster in decision making, strengthen collaboration with government and local communities.
We have ambitious plans for the future. At the end of this year, we expect to have a total CAPEX of over $ 150 Million and an overall oil production from the Patos-Marinza oilfield of about 800 thousand tons. We forecast to drill over 80 new oil wells in 2019. Our operations program is focused in primary and secondary methods where beside polymer and water flood and we have introduced thermal recovery, an unique technology used as well by important international oil companies for heavy oil developments.
What are your impressions of Albania Business Environment? How is your working relationship with the Government? What challenges have you faced?
The country is very opened to foreign investors and we have found a friendly business environment here in Albania. We have ambitious plans for our investment here in Albania and therefore we see the Albanian government as one of the closest partners to develop our strategy and business. We have a continuous dialogue and collaboration not only with the state institutions which monitor our activity (such as AKBN and Albpetrol) but also with different ministries which are interested as well in improving the performance of the Patos-Marinza oilfield.
As investors we see that frequent changes of laws are a challenge because they affect directly our business plans. Just recently has been introduced a draft law which will abrogate the existing law on fiscal system in petroleum sector as well as the royalty tax provided in the national taxes law. The draft law basically changes the tax regime for the contractors in the petroleum industry, such as Bankers, as well as the sub-contractors. The draft law might create legal uncertainty as contractors will have it difficult to protect their rights in the Arbitration as Tax Authorities gain more authority and the role of AKBN role as a party in the agreements will be almost diminished. Anyway, we expect that the government will start discussion with all the interested parts over this draft law and it will be adjusted based on the laws and agreements in place.
What are your expectations from the Albanian Government in their mission to improve the business climate further?
Albania has done very positive changes in the last years and has undertaken important reforms which help in attraction of the foreign investors. One of the most positive reforms which I believe will impact all the businesses operating in Albania is the judicial one. I believe that with very efficient courts the business climate will improve further and will help enterprises to increase their investments.
As to Bankers, we have had several disputes arisen from the License and Petroleum Agreements which have been decided in the expert and ICC. Bankers is committed to respect the License Agreement/Petroleum Agreement and the decision from ICC and expects the same from the authorities with the aim to settle any other related dispute and then so Bankers can be duly reimbursed.
What strategy does Bankers Petroleum implement to support local communities and comply with its best standards?
Local authorities and the government are our closest partners, so we are strengthening our relationship with them. We are not only developing an oilfield but we do our best to be a very positive example of Social Responsibility in local communities. We have a very developed strategy to support our local communities. Our core philosophy is that with the development of the company we also give the maximum for the development of the local community. I am really proud that we have invested many of our funds to support some social projects in the community such as infrastructure, schools and agriculture. We will continue to do what we started. In our next 4-5 year plan we have foreseen budgets to support local economies.