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Albania
Energy and Natural Resources
Since classical times, people have exploited the fossil-fuel
and mineral deposits present in the lands that now constitute
Albania. Petroleum, natural gas, coal, and asphalt lie in the
sedimentary rock formations of the country's southwestern regions.
The predominantly igneous formations of the northern mountains
yield chromite, ferronickel, copper, and cobalt. Albania also
has deposits of phosphorite, bauxite, gold, silver, kaolin, clay,
asbestos, magnesite, dolomite, and gypsum. Salt is abundant. About
70 percent of Albania's territory is about 300 meters above sea
level, twice the average elevation of Europe. Jagged limestone
peaks rise to over 2,700 meters. These great heights, combined
with normally abundant highland rainfall, facilitate the production
of hydroelectric power along rivers.
With its significant petroleum and natural-gas reserves, coal
deposits, and hydroelectric-power capacity, Albania has the potential
to produce enough energy for domestic consumption and export fuels
and electric power. Mismanagement led to production shortfalls
in the early 1990s, however, and forced the government to import
both petroleum and electric power. For years after production
dropped in the late 1970s, Albania's government considered statistics
on the performance of its petroleum industry a state secret; as
a consequence, data on the oil industry vary radically . Known
petroleum reserves at existing Albanian drill sites totaled about
200 million tons, but in 1991 recoverable stocks amounted to only
25 million tons. Albania's petroleum reserves generally were located
in the tertiary layers in southwestern Albania, mainly in the
triangle-shaped region delimited by Vlorė, Berat, and Durrės.
The principal petroleum reserves were in the valley of the lower
Devoll; in the valley of the Gjanicė near Patos in the southwest,
where they lay in sandy Middle or Upper Miocene layers; and in
Marinėz, between Kuēovė and Fier. Petroleum was refined in Ballsh,
near Berat; Cėrrik near Elbasan; and Kuēovė. The three refineries
had a capacity of 2.5 million tons per year.
In the 1980s, the petroleum and bitumen enterprises employed
10 percent of Albania's industrial work force, controlled 25 percent
of the country's industrial capital, and received almost 33 percent
of its industrial investment funds. Nevertheless, the industry's
share of the country's gross industrial production fell from 8.1
percent in 1980 to 6.6 percent in 1982 and perhaps as little as
5 percent in 1985. Albania only produced between 2.1 million tons
and 1.5 million tons of petroleum annually in the 1970s, according
to reliable estimates. Output sagged further during the 1980s
when extraction became increasingly difficult. Albania's wells
pumped only 1.2 million tons of petroleum in 1990. At some sites,
obsolete drilling equipment was extracting only 12 percent of
the available petroleum in situations where modern drilling and
pumping equipment would permit the extraction of as much as 40
percent.
Petroleum was the first industry to attract direct foreign investment
after the communist economic system broke down. In 1990 and 1991,
the Albanian Petroleum and Gas Directorate entered into negotiations
with foreign drilling and exploration firms for onshore and offshore
prospecting. In March 1991, the Albanian government and a German
company, Denimex, signed a US$500 million contract for seismological
studies, well drilling, and production preparation. Albania also
negotiated exploration contracts with Agip of Italy and Occidental
Petroleum, Chevron, and Hamilton Oil of the United States.
Albania's known natural-gas reserves have been estimated at 22,400
million cubic meters and lie mainly in the Kuēovė and Patos areas.
The country's wells pumped about 600,000 cubic meters of natural
gas annually during the late 1980s. Fertilizer plants consumed
about 40 percent of Albania's annual natural-gas production; power
stations consumed about another 15 percent. Planners projected
an increase in natural-gas production to about 1.1 million cubic
meters per year by 1995, but output tumbled during the first quarter
of 1991.
Albania's unprofitable coal mines produced about 2.1 million
tons in 1987. The coal, mainly lignite with a low calorific value,
was being mined mainly in central Albania near Valias, Manėz,
and Krrabė; near Korēė at Mborje and Drenovė; in northern Tepelenė
at Memaliaj; and in Alarup to the south of Lake Ohrid. Coal washeries
were located at Valias and Memaliaj. Albania imported about 200,000
tons of coke per year from Poland for its metalworks. Conditions
inside Albania's coal mines were deplorable, with much of the
work done by manual labor. Albania used most of its coal to generate
electric power.
About 80 percent of Albania's electric power came from a system
of hydroelectric dams built after 1947 and driven by several rivers
that normally carried abundant rainfall. Electric- power output
was estimated by Albanian officials at 3,984,000 megawatt hours
in 1988. Outfitted with French-built turbines, Albania's largest
power station, the Koman hydroelectric plant on the Drin River,
had a capacity of about 600 megawatts. The hydroelectric stations
at Fierzė and Dejas, also on the Drin River, had capacities of
500 megawatts and 250 megawatts, respectively, and used Chinese-built
turbines. Albania had no capacity to generate nuclear power, but
in the early 1990s a research nuclear reactor was reportedly under
construction with United Nations funds. In 1972 high-tension transmission
lines linked Albania's power grid with Yugoslavia's distribution
system. Albania's first 400-kilovolt high-tension line carried
power from Elbasan over the mountains to Korēė, where a 220- kilovolt
line carried it to Greece.
Droughts in the late 1980s and in 1990 brought an energy crisis
and a sharp drop in earnings from electric-power exports. In 1991
heavy rainfall allowed Albania to resume electric-power exports
to Yugoslavia and Greece. In the early 1990s, labor strikes and
transformer burnouts--caused by the overloading of circuits when
many Albanians turned to electricity to heat apartments after
other fuel supplies ran out--regularly resulted in blackouts in
towns across the country, and even sections of Tiranė, producing
disruption months at a time. Although the electrical grid reached
rural areas by 1970, the amount of power per household in farm
areas was limited to 200 watts, only enough to power light bulbs.
The chaos caused by economic collapse led to the destruction of
about 25 percent of Albania's 30,000 kilometer power-distribution
network.
Albania's mineral resources are located primarily in the mountainous
northern half of the country. Albanian miners extract mainly chromium
ore, ferronickel, copper, bitumen, and salt. Obsolete equipment
and mining techniques have hampered Albania's attempts to capitalize
on its mineral wealth. High extraction and smelting costs, as
well as Albania's overall economic collapse, have forced mine
and plant closures. The government repeatedly has promised to
take steps to reopen mines.
Some production estimates placed Albania just behind South Africa
and the former Soviet Union in the output of chromite, or chromium
ore, which is vital to the production of stainless steel. Foreign
studies estimated that Albania had more than 20 million tons of
chromite reserves, located mainly near the towns of Korēė, Mat,
Elbasan, and Kukės. Export of chrome and chromium products provided
one of Albania's most important sources of hard-currency income.
Albania's chromite industry, however, consistently failed to meet
plan targets and came under severe criticism in the waning years
of the communist regime. Estimates for chromite output during
1989 ranged from 500,000 to 900,000 tons. The drought-related
power cuts in 1990 and economic chaos in 1991 forced the closing
of ferrochrome enterprises at Burrel and Elbasan, and the government
desperately sought sources of foreign capital to invest in technological
improvements.
Albania's high-grade chromite reserves had been largely exhausted
by the 1990. The poor quality of the remaining ore accounted for
the country's worsening position in world markets. Impurities
present in Albania's highest-grade chrome were largely the by-product
of poor mining and smelting techniques and the use of antiquated
Chinese equipment. The country's chromium industry also suffered
because of inadequate transportation facilities. In the late 1980s,
construction was under way on a rail link connecting the main
chromium-ore production center at Bulqizė, in central Albania
with the port of Durrės and the main line to Yugoslavia. In the
late 1980s, Albania exported its chrome products mainly to Sweden,
the United States, the Federal Republic of Germany (West Germany),
Yugoslavia, and other East European countries. In 1980 Albanian
chrome sales to the United States accounted for about 75 percent
of the approximately US$20 million in trade between the two countries.
Despite its reported profitability, the chromium industry suffered
from a lack of worker incentive because miners frequently went
unpaid. In 1991 one of Albania's top economists revealed that
the country had never earned more than US$60 million a year from
chrome exports.
Albania also produced copper, iron, and nickel. The main copper
deposits, estimated at about 5 million tons, were located near
the northern towns of Pukė, Kukės, and Shkodėr. During the 1980s,
although the quality of copper ores was generally low, copper
was the most successful industry in Albania's mineral- extraction
sector. Copper production rose from about 11,500 metric tons in
1980 to 17,000 metric tons in 1988. The government aimed to export
copper in a processed form and built smelters at Rubik, Kukės,
and Laē. The industry's product mix included blister copper, copper
wire, copper sulfate, and alloys. Albania's principal iron ore
deposits, estimated at 20 million tons in the 1930s, were located
near Pogradec, Kukės, Shkodėr, and Peshkopi. The Elbasan Steel
Combine was Albania's largest industrial complex. In operation
since 1966, the steelworks had obsolete Chinese equipment. Annual
nickel output ranged from 7,200 to 9,000 tons in the 1980s.
Albanian bitumen and asphalt deposits were located near the town
of Selenicė and in the Vjosė River valley. Bitumen and asphalt
production rose significantly after World War II, and most of
the output was used for paving and waterproofing materials and
in the manufacturing of insulators and roofing shingles. Miners
had worked the Selenicė deposits continuously for centuries before
a lack of soap, boots, and basic equipment forced operations to
cease when the centrally planned economy stalled. Geologists estimated
that the Selenicė deposits would not be exhausted until several
decades into the twenty-first century at normal production rates.
Albania also possessed abundant deposits of salt, found near Kavajė
and Vlorė. Limestone, a principal raw material for Albania's construction
industry, was quarried throughout the country.
Data as of April 1992
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