Albania's ministry of energy and infrastructure said on Tuesday it signed a oil exploration agreement with Shell Upstream Albania, a wholly-owned subsidiary of Royal Dutch Shell, for an oil well in the southern Albanian mountain of Shpirag. 

Shell will invest an estimated $42.5 million (34.2 million euro) over seven years in the search for oil at Shpirag-4 well, divided in three phases, the ministry said in a press release after the signing ceremony. 

The maximum duration of the agreement is 25 years with an option for extension if Shell discovers a new oil deposit.    

Shell started drilling an oil appraisal well in Shpirag-4 in January. 

The Shpirag-4 is classified as a deep well and is the fourth drilled by Shell Upstream Albania, the previous ones being Shpirag-2, Molisht-1 and Shpirag-3. 

The Shpirag oil deposit, discovered by Shell within Block 2-3, is at a depth of 6,000 to 7,000 metres. 

Albania has oil reserves of 220 million barrels and natural gas reserves of 5.7 billion cubic metres. The Patos-Marinza oil field near the southwestern city of Fier is the largest onshore field in continental Europe.