In 2009 the EBRD granted a borrowing based loan, an environmental loan and an equity investment in Bankers Petroleum Ltd. (“Company”) to support this medium sized oil company in the remediation and redevelopment of the Patos-Marina oilfield, which is one of the largest on-shore oilfields in Europe. In addition to the Company’s license area, the Bank supports the Company and Government with the aim of wider remediation of adjacent sites which have been impacted by oil field operations and managed by the State-owned oil company Albpetrol whose operations are currently intermingled with that of the Company.
In 2013 the EBRD extended the maturity and increased the amount of the original borrowing based loan in order to help the Company consolidate its financial position and keep it engaged in the environmental and social outreach programs already initiated.
Positive transition impact potential is expected to arise from increased private sector participation in the oil and gas upstream sector in Albania, which so far has been dominated by state-owned Albpetrol.
The project is also expected to lead to a significant upgrade of environmental standards and skills and technological transfer. The Company has introduced in Albania heavy oil handling techniques that vastly improve oil recovery and minimize environmental damage. In addition to the conventional recovery techniques, Bankers intends to introduce in Albania two new recovery techniques: polymer flooding and thermal programs. The new recovery processes, if proved successful, can be replicated by other producers with mature oil fields in Albania.
Increased transparency through adherence to Publish What You Pay (“PWYP”) has been agreed with the Company.
Finally, an associated technical cooperation programme will support the Albanian authorities and the Company in developing a social/retrenchment programme has the potential to build institutional capacity to deal in the future with these issues according to best international practices.
Bankers Petroleum is a Calgary-based oil and gas exploration and production company and will be responsible for the implementation of the project.
The facility consists of a US$ 50 million (€39 million equivalent) long-term borrowing based debt and US$ 5 million (€3.9 million equivalent) environmental remediation loan. In addition, the Bank will also take an equity stake of up to C$ 12 million (€ 7.6 million equivalent). In 2013 the US$ 50 million borrowing based debt was increased to US$ 100 million.
The IFC will co-finance the project on a 50-50 basis through mirror facilities.
Intial: US$ 130 million.
Extension: US$ 439 million.
Categorised B. The project involves further development of an existing oil field. Environmental, health, safety and labour issues associated with this transaction can be readily identified and addressed through mitigation measures.
The environmental and social due diligence (ESDD) for the new transaction involved an independent environmental and social (E&S) audit which covered a focused review of the recent documents such as various work plans, baseline and monitoring reports, policies and procedures and an audit by consultants focusing on the identified key issues such as health and safety, security, waste management, implementation of the grievance mechanism, resettlement policies, in the field. Based on the ESDD, the original Environmental and Social Action Plan (ESAP) has been revised to reflect progress made by Bankers Petroleum Albania (BPAL) and to highlight new emerging issues. EBRD and IFC environmental and social specialists carry out annual monitoring visits for the project. Below is a brief summary reflecting the findings of the ESDD and the last monitoring site visit carried out in November 2014:
Bankers has policies in place covering Health, Safety and Environment; Corporate Social Responsibility; and Security. Implementation is organized via their Health, Safety, Security and Environmental (HSSE) & Community Relations Management System. A Management System framework document describes how the HSSE aspects of Bankers' activities, including contractor activities, are integrated into all operations. The framework describes the key elements of a Management System incorporating international standards, plans and procedures) that are designed to ensure HSSE risks are controlled and continuous improvement in HSSE performance is achieved. The elements of the Management System are in line with environmental management system standard ISO 14001, the quality standard ISO 9001 and the occupational health and safety standard OSHAS 18001. The ESMS is implemented by Bankers' experienced HSSE & Community Relations team.
The results of the air quality monitoring show some exceedances. As required under the ESAP, BPAL has initiated installing Vapour Recovery Unit (VRU) systems on well pads. VRU systems will continue be extended to cover the whole field.
Procedures for handling, storage and transportation of hazardous materials and waste are in place, and a waste management plan is in effect. The use of two in-field incinerators has allowed BPAL to reduce the backlog of contaminated waste on site by over 50 per cent. As per the ESAP, additional studies were undertaken to improve the operational procedures. Incinerators have been switched to gas fuel in November 2014. Bankers will reevaluate the emissions and communicate results to the EBRD by mid-2015.
As part of the exploration of the oil field, BPAL aim to achieve progressive rehabilitation of the site through the removal of contamination during lease upgrading and improved environmental management. When BPAL enters an existing site in the field the surface oil contamination is cleaned up before operations begin. Leases are risk ranked based on contamination and proximity to sensitive receptors. Some 200 contaminated well lease clean-ups were completed in 2012 in association with a water shutoff program at old Albpetrol (the government run oil company) wells. A further 220 leases were cleaned up in 2013. In 2013 BPAL has completed an additional 80 locations to support the clean-up initiative. BPAL prepare to commission a sludge treatment facility in Q4 2014. Completion of the sludge treatment facility in 2014 will allow BPAL to expand reclamation activities to clean up the priority sites and the sludge pits.
BPAL has installed 130 groundwater monitoring wells in the field area adjacent to production facilities and sludge pits. Quarterly surface and groundwater monitoring is being conducted by a specialist consultancy. Groundwater has been impacted by contaminants in several locations over the life of the field, though a quantitative risk assessment commissioned by BPAL indicates that there are currently no significant risks posed to staff or local communities by contaminated groundwater. No adverse trends are observed in terms of contamination.
The key concern amongst local communities has been employment. Aside from direct employment opportunities – which are lower than under Albpetrol management – Bankers is developing vocational training programs and other economic development support initiatives, in consultation with local stakeholders. These include initiatives as diverse as English language training courses and irrigation programmes. Other concerns raised by communities have included disturbances from dust, noise, air pollution; health and safety of pedestrians, cyclists and children walking on narrow sidewalks; road damage from heavy use and possible damage to adjacent properties caused by vibrations. Bankers is acting on many of these concerns on an ongoing basis and feeding the results back to affected communities. A key element of the stakeholder engagement process is the existence and use of the Community Grievance Mechanism which Bankers actively maintains and reports on to senior management.
The occurrence of earthquakes has created a number of concerns amongst certain community members, who attribute the tremors to Bankers’ sub-surface activities. In response, Bankers has compiled a Public Information Document covering the nature of earthquakes and has disseminated this to communities. The Community Relations team also met with local leaders in all of the affected areas of operation to discuss related matters, including analytical findings from Bankers Geologists. Albania’s National Agency of Natural Resources (AKBN) has taken up the issue and formed an independent committee to monitor and evaluate / address these concerns. Following an investigation by Compliance Advisor Ombudsman consultants, it was recommended and agreed that a collaborative working group be set up of key stakeholders in order to find a way forward and that one of the actions should also be to carry out further scientific investigations. To this extent seismometers are being set up in appropriate locations.
Overall in the last two years, BPAL has made considerable progress with respect to stakeholder engagement. A stakeholder engagement plan is in place and there has been a pro-active approach to managing the grievances. Encouraging progress has been made in community development which has incorporated actions in both community consultation and mitigation as well as some effective community investment programmes.
€50,000 has been provided by DFID to support the retrenchment issues associated with the project by working with relevant government departments.
In addition, there may be opportunities for further TC projects associated with the environmental clean-up activities.
Abby Badwi, President and Chief Executive Officer (403) 513-2694
Doug Urch, VP, Finance and Chief Financial Officer (403) 513-2691
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