AN INTERVIEW WITH ABBY BADWI,
PRESIDENT and CEO OF BANKERS PETROLEUM
(As of June 12, 2009)
We are just recently back from a tour of Bankers Petro-
leum’s enormous holdings in Albania. While there, we did
this interview with company President Abby Badwi.
David Pescod: Abby Badwi, with your success with Rally
Energy, it looks like you are trying to do the same thing here
in Albania. You are putting together an amazing team,
bringing in new technology into an area that has already got
some reserves. But first of all, people have conceptions
about Albania. What do you think of the country and its po-
tential?
Abby Badwi: Albania and Patos were a fantastic surprise
for me. When I came over here I saw not only the size of the
field, but the number of people that were involved in the pro-
ject and how old the oil industry was in Albania and how
they developed this large asset with 2400 wells that have
been drilled over a 50-year period. People are educated,
industrious, they work hard and it was very easy for us to
grow our operation here. Prior to my arrival (Bankers has
been here since 2004) they had an excellent team of nation-
als and expatriates. So as I say, it was easy for me to come
and fill in and try to build the company beyond what it had
already achieved.
DP: You must have concepts about Albania and what you
see for the country and interestingly enough, your history.
Rally was a very successful company you built and sold,
and you are also part Egyptian, but you’ve also got your
grandfather who was Albanian.
AB: That is correct. My grandfather on my mother’s side
was Albanian. He did fight in the Turkish Army during the
First World War and then immigrated to Egypt and that’s
how I got my Albanian heritage. I feel that I am part of this
community. It is a Mediterranean culture and that’s where I
grew up in Alexandria on the Mediterranean Coast of Egypt.
My biggest achievement was in Rally Energy and it was
something that I was very proud of and coming to Albania to
a much bigger field than Rally’s, I hope we can achieve the
same success we achieved at Rally and this would be a
great, personal satisfaction.
DP: When we toured the field, it was just mind-blowing the
potential size of it. There are thousands of wells that have
been drilled over the last 50 years by the Chinese, Rus-
sians and Albanians and one of the big questions is – just
how big this is and just how little of it has produced so far.
AB: The current outline by the wells that have been drilled
to date is in excess of 40 square kilometers. So that’s very,
very sizeable. However, the work that we’ve been doing in
the last couple of years indicates that the field has an ex-
tension to the west and to the north that can add another
50% areal extent. This is the area size, but it also has
some thick oil bearing formations of some 300 meters thick
in the heart of the field with fantastic porosities adding in
excess of 4 billion barrels of oil in place. Our challenge
now is to convert a good portion of that oil in place into
recoverable reserves by deploying various Canadian-style
recovery methods.
DP: The number you are mentioning is interesting because
some people suggest that it is the resource number that
could be as large as 6 or maybe even 8 billion barrels. This
is immense!
AB: As you are saying, this is a huge field. It’s the largest
onshore oil field in continental Europe and those numbers
that you do mention can be there. As you know in our
business, you use a lot of probability to determine reserves
and the 50% probability for the oil in place is 4.7 billion bar-
rels. If you go into the 10% probability, it can get into the 6
and 7 billion barrels of oil in place.
DP: The big question of course, is how much can you re-
cover?
AB: This is the challenge, but it’s also what we know and
what we’ve been doing in the past. Canadians had been
leaders in heavy oil extraction. A lot of the equipment and
technology that we use in Albania are coming from Can-
ada. Our senior operating team is from Canada to share
their expertise with the local Albanian staff and be able to
prove that the technologies that we’ve practiced in western
Canada, can be implemented successfully here. We were
the first to use progressive cavity pumps at Patos Marinza,
a lifting technology that has been used for years in western
Canada around the Lloydminster area. I worked for Scep-
tre Resources in the 80’s, the company that drilled the first
horizontal/steam well in Tangleflags Saskatchewan back in
1987 and with the success of the project, we started to ex-
plore taking this technology internationally and hence, is
my love story with global heavy oil.
DP: Which is what this project is about…and that’s heavy oil. Now, your expertise is bringing in technology, forming
a team and then at a certain point, selling out like you did with Rally Energy to an even bigger company who can ad-
vance things even quicker.
AB: Our objective is not to sell. When Rally was sold they came to us. We were in the process of growing our re-
serves. We did not put ourselves up for sale. People just got attracted to what we had. I hope that this doesn’t hap-
pen too soon here because we still want to grow our reserves and our production significantly before anyone comes
in and tries to undercut our objectives so they can have a bigger piece of the pie as it evolves. There is going to be a
time when this asset might be too big for a company the size of Bankers, and someone else can do a better job with it.
We don’t have a specific date that we are looking at achieving this, we are just going to go about doing our business
and it will be a natural consequence of our growth that some bigger company will be interested in us.
DP: Looking ahead, there is always something that comes out of left field. What are the things you would worry
about?
AB: Oil price, oil price, oil price. We’ve seen what has happened last fall and the first quarter of this year. Heavy oil
of course, you cannot sell it for the full quoted value, we only get about 55% of Brent price for the quality of our crude.
Our operating costs is a bit higher than light oil. We do pay an average 23% royalties in the country and when you
add all of these factors together, at $40 oil, we break even. At $60 oil, we start making $12 to $15 netbacks. At $70, we
make $20 netback and we can run our operations and have significant capital programs to develop this field for many
years to come.
DP: Our favorite question as I am sure you are aware of…what are your predictions for the price of oil for Christmas
this year and Christmas next year and of course, if you had to suggest an oil stock (other than your own) that would
double or triple – what would it be?
AB: On the price of oil, I have always been very bullish. It’s a global and in high demand commodity. I don’t see any
alternative sources of energy that can take the place of oil anytime soon. We are growing in the area of sustainable
energy, but oil will be around for a long time and hence why I am bullish on it. It will have some peaks and troughs
along the way and we’ve seen the corrections because of over-inflated prices from last summer of $140 and de-
pressed prices of $35 in the fall, but the general trend will continue to be an upward trend and if we take a base of $60-
$70 that we are in right now, I can see growth from that number at a good 5% to 10% per annum and you can make
your prediction over the next several years with hiccups of ups and downs. If you use that concept and where we are
at right now, we should get to $80 by Christmas. If you give it another 10% for next year – that’s $88 – $90 for Christ-
mas 2010.
The stock pick question is always a tough question. Not too many doubles out there. As you know, I’ve had my favor-
ites in the past, but again, due to the cost and lack of capital at lower oil prices, that changed my outlook on some of
those stories. I am looking at the bigger integrated oils to do very well in the long-run and I’m going to go with the
largest oil company Exxon-Mobil for a 20-25% gain in the next year.
DP: Thank you very much Abby!