Tirana, September 22 nd, 2008 NATIONAL AGENCY OF NATURAL RESOURCES AKBN’S ACTIVITY

The National Agency of Natural Resources (AKBN), is a public institution, constituted by the Decision of the Albanian Council of Ministers No.547, date The National Agency of Natural Resources (AKBN), is a public institution, constituted by the Decision of the Albanian Council of Ministers No.547, date The National Agency of Natural Resources takes care of all petroleum, hydropower, mining activities and, since April 2007, takes also care of renewable sources of energy, energy efficiency and of the National Strategy of Energy (Decision of the Council of Ministers No.202, date ). The National Agency of Natural Resources takes care of all petroleum, hydropower, mining activities and, since April 2007, takes also care of renewable sources of energy, energy efficiency and of the National Strategy of Energy (Decision of the Council of Ministers No.202, date ). The Agency relates directly to the Minister of Economy, Trade and Energy. The Agency relates directly to the Minister of Economy, Trade and Energy. The Agency is the main official and institutional adviser to the Albanian Government on all mining, petroleum, hydropower and energy activities. The Agency is the main official and institutional adviser to the Albanian Government on all mining, petroleum, hydropower and energy activities. The Agency is the Albanian institution that promotes all natural resources, objects of its own activities. The Agency is the Albanian institution that promotes all natural resources, objects of its own activities.

DEPARTMENTS MINING DEPARTMENT MINING DEPARTMENT PETROLEUM DEPARTMENT PETROLEUM DEPARTMENT HYDRO POWER DEPARTMENT HYDRO POWER DEPARTMENT RENEWABLE ENERGY DEPARTMENT RENEWABLE ENERGY DEPARTMENT COORDINATION DEPARTMENT COORDINATION DEPARTMENT

MINING DEPARTMENT Consults and collaborates with relevant Albanian and foreign institutions, in order to select targets, prepare strategies and policies related to mining activities; Consults and collaborates with relevant Albanian and foreign institutions, in order to select targets, prepare strategies and policies related to mining activities; Follows and fulfills all obligations related to and derived from strategies and policies in mining sector; Follows and fulfills all obligations related to and derived from strategies and policies in mining sector; Provides technical expertise on engineering studies projects and programs, concerning mining and post mining activities; Provides technical expertise on engineering studies projects and programs, concerning mining and post mining activities; Promotes all kind of Albanian mining resources. Promotes all kind of Albanian mining resources. Controls and supervises all given mining exploitation licenses and asks for the correct fulfillment of the development programs’ implementation; Controls and supervises all given mining exploitation licenses and asks for the correct fulfillment of the development programs’ implementation; Supervises post mining activities. Supervises post mining activities.

The map of Albania with mining permits according to the districts Exploration, exploitation and processing of mineral ores represents a significant activity for the Albanian economy. The restructuring process on mining sector, after the collapse of the regime, passed through the following stages: Closure of all mines valuated non effective and conservation of other ones (1993, still ongoing)), Closure of all mines valuated non effective and conservation of other ones (1993, still ongoing)), Privatization process (1994, still ongoing), Privatization process (1994, still ongoing), Restructuring of chromium and copper state owned enterprises (1994 – 1998), Restructuring of chromium and copper state owned enterprises (1994 – 1998), Constitution of all needed legal framework, based on the free market principles (1994, still ongoing), Constitution of all needed legal framework, based on the free market principles (1994, still ongoing), Concessions on mining sector assets (1995, still ongoing). Concessions on mining sector assets (1995, still ongoing).

The legal framework related to mining exploration and exploitation in Albania is governed by three principal laws: “Mining Law of Albania“; “Mining Law of Albania“; “For civil use of explosives in the Republic of Albania”; “For civil use of explosives in the Republic of Albania”; “On national taxes”. “On national taxes”. Any kind of mining activity related to engineering, assessment, consulting, monitoring, technical supervision etc. is conducted through a Professional License. Any kind of mining activity related to engineering, assessment, consulting, monitoring, technical supervision etc. is conducted through a Professional License. LEGAL FRAMEWORK

Mining Permits according to the years

PRODUCTIONIN 2006 and 2007 PRODUCTION IN 2006 and 2007 No.MineralProduction Chrome tons tons 2. Chromium Concentrate 2800 tons 3.Copper tons 4. Copper Concentrate tons 5. Fe-Ni and Ni-Si tons tons 6.Coal tons 4000 tons 7.Limestones m m 3 8. Marbled limestones blocks m m 3 9. Beded limestones m m Sandstone in blocks and beded m m 3 11.Clays tons tons 12.Gypsum tons tons

CHROME Category B+C million tons Category B+C million tons Category C 2 : 15.1 million tons Category C 2 : 15.1 million tons Total: B+C 1 +C 2 :36.9 million tons Total: B+C 1 +C 2 :36.9 million tons There are three main chrome regions in Albania: Estimated geologic reserves of chrome in these regions are: Chrome’s deposits 1.North-East Region (Ultrabasic Massif of Tropojaand Kukës) 1.North-East Region (Ultrabasic Massif of Tropoja and Kukës) 2.Central Region (Ultrabasic Massif of Bulqiza). 3.South-East Region (Ultrabasic Massif ofShebenik-Pogradecit) 3.South-East Region (Ultrabasic Massif of Shebenik-Pogradecit)

COPPER : In Albania there are four main types of copper deposits : Hydrothermal-Methasomatic and Volcanogenic-Sedimentary Deposits (Munella, Qaf-Bari, Gurthi, Rruga Rinise, etc.); Hydrothermal-Methasomatic and Volcanogenic-Sedimentary Deposits (Munella, Qaf-Bari, Gurthi, Rruga Rinise, etc.); Main type Volcanogenic-Hydrothermal- Methasomatic Deposits, as: Tuçi, Spaci, Derven, Paluca, etc.); Main type Volcanogenic-Hydrothermal- Methasomatic Deposits, as: Tuçi, Spaci, Derven, Paluca, etc.); Volcanogenic - Sedimentary Deposits (Munella, Gjegjan, Palaj, Karma, Rubik); Volcanogenic - Sedimentary Deposits (Munella, Gjegjan, Palaj, Karma, Rubik); Metasomatic Sulphide Massif Deposits (Kurbneshi, Golaj, Thirra, Nikoliqi etc.).. Metasomatic Sulphide Massif Deposits (Kurbneshi, Golaj, Thirra, Nikoliqi etc.).. Copper’s deposits

Nickel Nickel deposits in Albania are located in: Devoll (Bilishti, Bitincka); Devoll (Bilishti, Bitincka); Pogradec – Librazhd (Guri I Kuq, Cervenake, Prrenjas, Skroske, Xixillas, Bushtrice); Pogradec – Librazhd (Guri I Kuq, Cervenake, Prrenjas, Skroske, Xixillas, Bushtrice); Kukes (Mamez, Trull Surroj, Nome) Kukes (Mamez, Trull Surroj, Nome) The nickel ore is under the composition form of iron-nickel (Pogradec, Librazhd % Ni), or under the composition form of nickel- silicate (Devoll, Kukes - 1.1–1.4 % Ni). Deposits of Fe-Ni and Ni-Si

Tirana: 86% of reserves; Tirana: 86% of reserves; Korça - Pogradec: 10% of reserves; Korça - Pogradec: 10% of reserves; Memaliaj: 4% of reserves. Memaliaj: 4% of reserves. Coals are lignites ( generally) Analyticalcalorific value: 2000 – 5600 kcal/ kcal/kgAnalytical calorific value: 2000 – 5600 kcal/ kcal/kg Calorific value in concentrates: up to kcal/kg.Calorific value in concentrates: up to kcal/kg. COAL Coal reserves In Albaniaare estimated to be approximately 794 million tons. Coal reserves In Albania are estimated to be approximately 794 million tons. They are located in three main regions: Coal’sdeposits Coal’s deposits

NON-METALLIFEROUS MINERALS Albania is rich on the industrial minerals (non-metalliferous). The most important minerals are: Limestones,Limestones, Dolomites,Dolomites, Clays,Clays, Decorative stones,Decorative stones, Basalts,Basalts, Gypsums and anhydrites etc..Gypsums and anhydrites etc.. Deposits of non-metalliferous minerals

PETROLEUM DEPARTMENT Assists the Albanian government, in collaboration with other institutions, in drafting policies in petroleum sector; Assists the Albanian government, in collaboration with other institutions, in drafting policies in petroleum sector; Negotiates all Petroleum Agreements on behalf of the Albanian Government; Negotiates all Petroleum Agreements on behalf of the Albanian Government; Supervises the Petroleum Operations; Supervises the Petroleum Operations; Manages the Petroleum Data; Manages the Petroleum Data; Promotes free areas for exploration, development and production of petroleum. Promotes free areas for exploration, development and production of petroleum.

ATTRACTION OF FOREIGN INVESTMENTS IN PETROLEUM ACTIVITIES THROUGH: Opening policies on oil and gas industry, in order to facilitate free competition and market liberalization; Opening policies on oil and gas industry, in order to facilitate free competition and market liberalization; Flexible and fast licensing procedures. Flexible and fast licensing procedures.

LEGAL FRAMEWORK The legal framework for petroleum exploration and production in Albania is governed by three principal laws: The legal framework for petroleum exploration and production in Albania is governed by three principal laws: −The law “On petroleum (exploration and production)”; −The law “On the fiscal system on petroleum sector” −The law “On national taxes”. Specificities of petroleum legislation: Specificities of petroleum legislation: −Deals with technical and general issues; −Deals with fiscal issues; −Is simple; −Is clear; −Offers flexibility.

LICENSING ROUNDS ORGANIZED AFTER 1990 Offshore Licensing First Onshore Second Onshore Round Licensing Round Licensing Round Offshore Licensing First Onshore Second Onshore Round Licensing Round Licensing Round

CURRENT PETROLEUM LICENSING SITUATION IN ALBANIA  Block Durres (Offshore) awarded in Contractor and operator Island International Exploration BV;  Block Joni 5 (Offshore) awarded in Contractor and operator Capricorn Albania Limited;  Blocks A and B (Onshore) awarded in Contractor and operator DWM Petroleum AG;  Blocks D and E (Onshore) awarded in Contractor and operator DWM Petroleum AG. The current licensing situation for petroleum exploration in Albania on February 1st, 2008:

Existing Oil and Gas Fields LICENCE-AGREEMENTS FOR DEVELOPMENT AND PRODUCTION, RELATED TO EXISTING OIL AND GAS FIELDS ISSUED TO ALBPETROL: Licence-Agreement for Patos- Marinza oilfield issued in Contractor Bankers Petroleum; Licence-Agreement for Ballsh-Hekal oilfield issued in Contractor Stream Oil & Gas; Licence-Agreement for Ballsh-Hekal oilfield issued in Contractor Stream Oil & Gas; Licence-Agreement for Cakran-Mollaj oilfield issued in Contractor Stream Oil & Gas; Licence-Agreement for Cakran-Mollaj oilfield issued in Contractor Stream Oil & Gas; Licence-Agreement for Gorisht-Kocul oilfield issued in Contractor Stream Oil & Gas; Licence-Agreement for Gorisht-Kocul oilfield issued in Contractor Stream Oil & Gas; Licence-Agreement for Delvina oil& gas field and Delvina exploration block issued in Contractor Stream Oil & Gas; Licence-Agreement for Delvina oil& gas field and Delvina exploration block issued in Contractor Stream Oil & Gas; Licence-Agreement for Kucova oilfield issued in Contractor Sherwood International. Licence-Agreement for Kucova oilfield issued in Contractor Sherwood International.

SOME DATA ON OIL PRODUCTION IN ALBANIA IN Year Oil production in Albania (ton) Export sales deliveries of crude oil (ton) Total From limestone deposits From sandstone deposits From foreign companies

HYDRO POWER DEPARTMENT Consults and collaborates with relevant government structures, on preparing policies related to hydro power sector; Consults and collaborates with relevant government structures, on preparing policies related to hydro power sector; Applies the governmental policies in hydro power sector; Applies the governmental policies in hydro power sector; Provides the technical expertise, in respect with its own institutional obligations, on studies and projects in hydro power sector; Provides the technical expertise, in respect with its own institutional obligations, on studies and projects in hydro power sector; Supervises hydro power activity; Supervises hydro power activity; Monitors concessionary contracts on hydro power plants. Monitors concessionary contracts on hydro power plants.

RENEWABLE ENERGY DEPARTMENT Consults, advises and collaborates with all relevant governmental institutions, on policies related to renewable energy sources, energy efficiency, aiming the improvement of the Albanian National Strategy of Energy; Consults, advises and collaborates with all relevant governmental institutions, on policies related to renewable energy sources, energy efficiency, aiming the improvement of the Albanian National Strategy of Energy; Promotes the different initiatives and investments in renewable energy sources; Promotes the different initiatives and investments in renewable energy sources; Proposes different energy efficiency measures and implementation programmes in all the Albanian economy sectors; Proposes different energy efficiency measures and implementation programmes in all the Albanian economy sectors; Compiles and publishes the Annual Energy Balance at national level, based on energy database and statistics. Compiles and publishes the Annual Energy Balance at national level, based on energy database and statistics.

Coordinates the administrative and economical problems between the Agency’s Departments, offering a specialized support and aiming the harmonization of all structures of the Agency as a solid administrative body; Coordinates the administrative and economical problems between the Agency’s Departments, offering a specialized support and aiming the harmonization of all structures of the Agency as a solid administrative body; Plans and controls the realization of the economical and financial requirements, aiming the effective use of financial sources and the good administration of the monetary values and all assets of the Agency; Plans and controls the realization of the economical and financial requirements, aiming the effective use of financial sources and the good administration of the monetary values and all assets of the Agency; Organizes and coordinates the work with other departments of the Agency and thirds, in order to better promote all the Albanian natural resources; Organizes and coordinates the work with other departments of the Agency and thirds, in order to better promote all the Albanian natural resources; Publishes and updates the Agency’s activities in its own website, enabling investments from domestic and foreign companies; Publishes and updates the Agency’s activities in its own website, enabling investments from domestic and foreign companies; Assists the Chairman of the Agency and its structures, in making possible the fulfilment in time of all administrative obligations. Assists the Chairman of the Agency and its structures, in making possible the fulfilment in time of all administrative obligations. COORDINATION DEPARTMENT

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