TIRANA, Dec. 7 – Canada-based Bankers Petroleum says it has reached a deal with the Albanian government over a $57 million tax dispute that will allow the country’s largest investor to regain control of its Albanian bank accounts and operate under normal conditions by paying the disputed amount in instalments while expecting the results of a third-party audit and a possible solution by Paris-based ICC International Court of Arbitration.
Bankers, whose shares at the Toronto Stock Exchange lost 33 percent last week, hitting a six-year low after the escalation of the conflict with the Albanian authorities, said it had agreed to pay a 10 percent deposit of the original $57 million tax assessment and make monthly payments of $4.27 million during 2016.
“This arrangement will allow the company and the government to cooperatively seek a resolution on the 2011 cost recovery audit through the third-party expert audit which is expected to follow an expeditious timetable, and if necessary through a finding from the ICC arbitration process that is proceeding in parallel,” the company said in a statement.
The Albanian government and the country’s largest foreign investor, Canada-based Bankers Petroleum, saw an escalation of their $57 million tax dispute last week after Albanian authorities refused to unfreeze the company’s bank accounts. The dispute seemed to be headed for an amicable solution last week after a ruling in the company’s favor, but the Albanian authorities’ failure to acknowledge the international arbitration court’s temporary ruling on the accounts and statements on the matter by both parties could affect the company’s operations in Albania.
National oil producer, Albpetrol, which also supervises concession deals with private oil exploration and production companies, has already selected prestigious U.S.-based Curtis, Mallet-Prevost, Colt & Mosle LLP in the arbitration case with Bankers over the $57 million tax dispute involving $250 million in disputed costs from the company’s operations in 2011.
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 started paying 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.
Bankers Petroleum says it has invested $1.4 billion during its 11 years of operations in Albania, becoming the largest foreign investor and employing over 1,500 people.
