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Recent Political Protests in Albania

There have been intermittent protests against the government since the most recent federal elections in

June 2009 which the Socialist opposition alleges were rigged. The Socialist Party has refused to accept

the results of the election which gave SaliBerisha a second four-year term.

On Friday, January 21 2011, Socialist supporters staged a demonstration in central Tirana, pelting the

prime minister's office building with sticks and stones, prompting police to respond with tear gas, rubber

bullets, water cannon, stun grenades and firearms. As thousands gathered to protest, violence broke out

and three demonstrators were shot dead, apparently by members of the Republican Guard.

Despite this recent tragic event, our view remains that neither the current protests, nor political unrest

more generally are likely to have any significant or long term effect on the oil and gas companies

operating in Albania.

Both the government and the opposition recognize the importance of the industry (and related foreign

investment and technology). Furthermore, from a fiscal perspective, the country is simply too

dependent on the tax and royalty revenues generated as a result of foreign investment in the oil sector.

Finally, entrance into the EU is of fundamental importance to both political parties and this desire to be

admitted into the club limits any potential fallout to the International Oil and Gas sector that may

occur if there were to be a change in government.

This sentiment was echoed by Bankers Petroleum CFO Doug Urch.

"Even leading up to the elections in 2009, Abby had meetings with leaders of both parties," said Urch.

"Both parties support Bankers' operations in the country and recognize the foreign investment we

brought in and the increase in oil production."

However Corruption Charges Somewhat More Troubling

On January 14th Ilir Meta, the deputy prime minister, resigned after the release of a video that

appeared to show him putting pressure on another minister to secure a deal over a hydroelectric plant

which would have seen them both benefit financially.

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The resignation came after a local television aired footage showing Meta pressing former Economy

Minister DritanPrifti to grant a public tender for a hydro power station to one of his friends. Meta, who

leads a small party in the coalition government, became economy minister in September, replacing Prifti

who was forced from office on corruption charges.

"I am here to declare I'l l resign from the government job to start fighting against the phenomenon ofthreat to the institutions and future of Albania," Meta said.

Meta said he would resign as Albania's economy minister, as well as the country's deputy prime minister

and that he has submitted his resignation letter to Prime Minister SaliBerisha.

"This is my personal decision, and it's irreversible," Meta said, "The law must triumph in Albania."

STILL PRO-WESTERN: Important that this be understood not as an attempted return to communism or

an anti-West revolt by the countrys majority Muslim population. Population described by The

Economist as fanatically pro-America. EU envoys and American diplomats seem to be somewhat

supportive of some of the opposition claims (particularly since Berisha called off Attorney-Generals

arrest warrants.

Socialist Parties in Europe are very mainstream. They are, on the contrary protesting in favour of sound

WESTERN values of freedom and democracy. Since travel rules were relaxed in Albania, only citizens of

ever-more isolated Kosovo need visas to enter the EU zone.

Fears exist that unrest and quasi-revolutions currentlytaking place in countries like Tunisia and Egypt

(often interpreted as a kind of Muslim populist awakening)could spread regionally. Popular uprisings can

and often do happen in waves in a self-reinforcing way. But even though Albania is Muslim and

corruption and totalitarian throwbacks are very real problems, the underlying fundamental factors

(particular socioeconomic ones) are missing in the Albania situation.

Growing pains of fledging democracy?

Bankers likely the safest as they are currently generating revenue and have proven that theirtechnical superiority is sine qua non.