Albanian authorities have given the go-ahead to Island Oil and Gas to obtain a 50 per cent interest in the Durresi Block off the coast of Albania.
The deal is in conjunction with OMV, one of central Europe's leading gas and oil groups.
The Minister for Communications, Marine and Natural Resources has also granted permission for a frontier exploration licence for Island to develop resources off the west coast of Ireland.
As part of an asset-swap agreement OMV will have a 50 per cent stake with Island.
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The agreement for the Irish project is between Island Rochall, a wholly owned subsidiary of Island, and OMV.