TIRANA, Nov. 8 (Xinhua) -- The Albanian government Wednesday announced that it would change contractual and fiscal framework for the hydrocarbons sector.
"Oil and gas resources often act as a source of contractual conflicts. Often, where there is oil and gas, there are clashes between the government and private contractors," the Albanian Energy Ministry said in a press release.
"Time has come to think big and draft a new fiscal and regulatory framework and change our contract models," the ministry said.
The ministry also noted that the Albanian government was cooperating with U.S. experts to strengthen the Albanian regulatory framework on fiscal and environmental control in the field of oil and gas in accordance with the best international experiences.
Meanwhile, it also said that the Albanian Finance Ministry was drafting a simpler tax system with the assistance of the U.S. State Department.
"The risk should be passed over to contractors while at present the government might obtain 50 percent of the profit tax from petroleum companies thus contract models have to be altered based on the best European practices," the ministry said.
Albanian Energy Minister Damian Gjiknuri said that such changes were necessary for Albania to offer better practices in contracting and fiscal regimes in the field of oil and gas in order to attract maximum investment.
The Bank of Albania had said that oil and gas exploration was a major destination for foreign investors in Albania, mainly from Canada and Greece.
In 2015, the discovery of an oil area in Berat County in southern Albania, reportedly attracted foreign companies, including Shell Oil, to increase investment in the country.