20
February 2020
INVESTIGATION
Controversial Greek Businessman Plots Return in Albania’s Oilfields Stream Oil & Gas founder SotiriosKapotas plots his return in the oil market in Albania through the company ‘Letho Resources’, seeking to conclude a new petroleum agreement with Albpetrol for the Gorisht-Kocul oilfield, only a few years after his previous company left behind a trail of debt. BESAR LIKMETA | BIRN | TIRANA
F
or nearly a decade, ‘Stream Oil and Gas’ – which merged with Transatlantic Petroleum in 2014, led by Greek businessman SotiriosKapotas and his Albanian partner Arian Tartari, controlled through production sharing agreements with state-owned oil company Albpetrol, the oilfield of Ballsh-Hekal, Gorisht-Kocul, Cakran - Mollaj as well as the gas field of Delvina. In 2017, after accumulating tens of millions of dollars in debt to Albpetrol and other local contractors, Transatlantic Petroleum Ltd was sold and divested its debt to another ‘offshore’ company, prompting the Ministry of Energy to terminate its production sharing agreements, restoring its oilfields of Albpetrol. A year later, Albpetrol opened a fresh tender in order reach new production sharing agreements for the three oil fields, Gorisht-Kocul, Cakran-Mollaj and Amonica. One of the main contenders is again businessman SotiriosKapotas, who is trying to make a comeback and control the Gorishti-Koculoifield through Letho Resources, which has waged a two-year legal battle against Albpetrol to be declared the winner of the tender. Court documents show that Letho Resources and another Canadian company - Alcan Petroleum Ltd share a common address in Tirana, which previously belonged to Stream Oil and Gas. Alcan Petrolem Ltd has also filed a lawsuit against Albpetrol for the 2018 tender held for the three oilfields. In addition to the administrative lawsuit against Albpetrol to be declared the wined of the much-contested tender for the Gorisht-Kocul oilfield, Letho Resources has also entered into an agreement to acquire the current Ballsh-Hekal oil concessionaire, Anio Oil and Gas sh.p.k. Letho Resources did not respond to written inquiries about its chief executive, SotiriosKapotas’s controversial past in the Albanian extractive industries market. Meanwhile, Arian Tartari was unreachable for comment until the publication of this article. Albpetrol and the Ministry of Energy and Infrastructure did not respond to a
Oil well on the village Hekal in Mallakastra | Photo: Besar Likmeta
request for comment from BIRN if they had approved the transfer of the Ballsh-Hekal oilfield from Anio Oil and Gas to Letho Resources Corporation. Political allegations According to the International Trade Administration, an agency of the US Commerce Department of Commerce, it is estimated that Albania has recoverable oil reserves equal to 120 million barrels and 5.7 billion m3 of gas. The largest oilfield is Patos-Marinza, which has been controlled by Bankers Petroleum since 2004 through a production sharing agreement with Albpetrol. From 2007 to 2017, Albpetrol had a similar agreement for the Ballsh-Hekal, Gorisht-Kocul, Cakran - Mollaj oilfields and the Delvina gas field with the ‘Stream Oil and Gas’, which merged in 2014 with the company ‘Transatlantic Petroleum Ltd’. ‘Stream Oil and Gas’ is a company founded on July 20, 2007 in the Cayman Islands - a British Caribbean territory considered a fiscal paradise. The company’s initial capital was 500,000 CAD. Three weeks after its founding, on July 8, 2007, the company entered into four production sharing agreements with Albpetrol. On April 2nd, 2008, the directors of Stream Oil and Gas appointed its branch managers in Albania, businessman Arian Tartari and Greek businessman SotiriosKapotas,
while the company was headquartered in “Ismail Qemali Street, Samos Tower, Floor V.” According to data from the System for Electronic Disclosure by Insidersin Canada, SEDI, as one of the company’s directors, Tartari received on April 4, 2008, 6 million shares of Stream Oil and Gas - half of which were sold in 2014. Tartariss shares in the company brought accusation by the then opposition Socialist Party, which in 2010 accused the businessman of benefits from the close ties to the family of former PM SaliBerisha. Tartari’s partner, AlbanaVokshi is a former Democratic Party MP. “Berisha has favored the company of MP AlbanaVokshi’s husband for personal gain, granting him the right to use 4 of the country’s 6 oilfields,” said Erion Brace at a press conference in August 2010, then deputy chairman of the Socialist Party parliamentary group. “On August 15, just one week after receiving government contracts, the company’s shareholders entered into transactions and bought 2 million shares of Stream Oil’s founders for $ 5 million,” Brace said. ‘Stream Oil and Gas’ director SotiriosKapotas considered the Socialist Party’s allegations false and threatened to sue Albanian in local and international courts. In a statement to the media, Kapotas urged the government and the opposition
to protect the company’s name and its investments against false statements, while adding that he would seek damages “’Stream Oil’ has no political bias and is in Albania to invest and not to be a political tool,” he underlined. A trail of debts One year after the Socialist Party came to power, on September 3, 2014 Stream Oil and Gas merged with Transatlantic Petroluem Ltd under a deal reported to be wotth $ 41.2 million. In addition to Albania, Transatlantic Petroleum Ltd stated that it had interests in oilfields in Turkey and Bulgaria. In 2015, the Albanian subsidiary of the company, according to data from the National Business Center, changed its name from ‘Stream Oil and Gas’ to ‘Transatlantic Petroleum’. It was during this period that the company’s problems with contractors began to surface, as a consequence of successive orders to seize shareholder quotas for outstanding obligations by private bailiffs. According to the 2015 balance sheet, Transatlantic Petroleum Company had outstanding liabilities to suppliers worth 1.87 billion lek (€15 million). However, while the shares of the Transatlantic Petroleum’s subsidiary in Albania were sequestered due request for payment from debtors, the parent company sold its assets to another offshore company. At the
