TIRANA, July 1 – The Albanian government has lost around half a billion dollars from failing to properly monitor the Patos-Marinza oil field which since 2004 has been managed by Canada-based Bankers Petroleum under a under a 25-year concession contract, says the High State Audit in a report.
An audit carried out into the National Agency for National Resources has unveiled failure to pay profit tax by the concessionaire has caused the state around $504 million in damage.
“In case there were no changes in development plans, working plans or executed budgets, the Albanian state would have benefited until the end of 2014, in addition to $199.4 million in mining royalty, even an amount of around $504.5 million from the main company operating in the oil sector,” says the report implying Bankers Petroleum.
Eleven years after launching its operations in the Patos-Marinze heavy oilfield under a 25-year concession deal with the Albanian government, Bankers Petroleum has not paid profit tax yet, which under Albanian law companies operating in the oil industry pay at a 50 percent rate only after meeting their investment costs.
The report says the recognition of mining royalty as cost recovery item has also had a negative impact on the profit tax and that the monitoring process by the ministry of energy, the National Agency for Natural Resources and Albpetrol oil company has almost been inexistent.
“This at a time when the amount of oil that has been extracted in certain oil fields was as big as it led them to exhaustion.”
The High State Audit describes the situation as severe and out of government control with severe consequences to the economy and local residents.
The High State Audit has recommended a series of disciplinary measures against officials in charge of monitoring the oil sector.
An incident involving the explosion of two oil wells in southwestern Albania which forced the evacuation of some sixty local households last week, made Canada-based Bankers Petroleum come under fire last April.
An audit carried out by the National Agency for Natural Resources has recently found that Bankers has already recovered its investments costs and should have started paying profit tax since 2011.
However, the company claims in its 2014 financial report that it has to recover another $175 million before starting paying the 50 percent profit tax.
Commenting on its operations in Albania in the past decade, Bankers says it has invested more than $1.2 billion, reviving the Patos-Marinze oilfield which numbered 2,000 workers at the end of 2014, and accounting for 35 percent of FDI in Albania.
Bankers also says it has paid the Albanian government around $500 million in mining royalty and other taxes in past decade.
The abuse of fuel quality by concession companies operating in domestic oil extraction is estimated to have caused the state budget millions of euros in damage, not to mention damage to motor vehicles and the environment.
An earlier report published by the country’s High State Audit after inspections in the first four months of this year has unveiled that the state budget lost around 11 billion lek (Euro 78 mln) in tax evasion by companies involved in oil extraction because of using adulterated fuels and not declaring the extra production. The practice is also widely used even in retail fuel stations where certified fuel is mixed with non-standard products to increase the volume at the expense of consumers and to avoid paying taxes.
