February 8, 2013 / 5:35 PM / in 6 years

Albania calls off Vetro offer for Albpetrol oil firm

* Albania throws out offer from Albanian-U.S. Vetro Energy

* Vetro failed to pay its 20 percent guarantee

* Negotiators to talk to China’s Win Business

By Benet Koleka

TIRANA, Feb 8 (Reuters) - Albania has invalidated the winning 850 million euro ($1.1 billion) bid by Vetro Energy to buy its Albpetrol oil company after the Albanian-U.S. firm failed to come up with an initial payment, the energy minister said.

Minister Edmond Haxhinasto said on national television on Friday that the government had decided to “consider the first offer invalid” after Vetro failed to pay 170 million euros, equal to 20 percent of its bid.

Vetro had asked for a postponement but still failed to pay by a second deadline on Dec. 3.

The agreed price, equal to about 10 percent of Albania’s gross domestic product, would have been a windfall that the Balkan state could have used to help reduce its budget deficit and public debt.

“This (government’s) decision has authorized the group of negotiators to continue evaluating the other offers,” Haxhinasto, who serves also as deputy prime minister, told Top Channel.

Chinese consortium Win Business, with an offer of 298 million euros, was next in line to talk to Albanian negotiators, followed by Bankers Petroleum of Canada, which offered 106 million euros.

The government has offered to sell all of Albpetrol’s above-ground assets, the right to explore and exploit oil and gas for 25 years and licences to build a refinery and transport and distribute gas.

A source close to Vetro’s majority shareholder, Albanian oil businessman Rezart Taci, said the group was “surprised by the decision because we were working to finalise the deal”.

The decision could not found on the government’s website, where such decisions are normally published.

The government cancelled the deal after waiting on Vetro for two months and as it starts to prepare for parliamentary elections on June 23.

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