TIRANA, Sept. 14 – Canada-based Bankers Petroleum and the Albanian government have reached a deal to hire an international audit firm to settle a dispute over $57 million in claimed taxes by the country’s National Agency for Natural Resources.
In a statement issued this week, Bankers Petroleum, which operates the Patos-Marinza heavy oilfield in southwestern Albania, said an international audit firm will be contracted as a third party, to audit the company’s operating and capital expenditure to settle the dispute over the company’s potential taxable position.
“This represents a significant step towards enhancing transparency in the administration and regulation of oil and gas activities in Albania. Bankers views this commitment by the authorities as an important milestone in the ongoing improvement of our operations,” said David French, President and CEO at Bankers Petroleum.
In its 2014 financial report, Bankers Petroleum said it had received an audit report from Albania’s National Agency for Natural Resources with findings that could result in a $303 million reduction to the cost recovery pool and a potential taxable position.
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 audit carried out by the National Agency for Natural Resources 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.
In an unusual situation since a decade of operations in Albania, Canada-based Bankers Petroleum, which operates the Patos-Marinza heavy oilfield, reported losses of about $9.6 million in the first half of this year on a sharp cut in oil prices, compared to record profits of $52 million during the same period last year when international oil prices were at a historic high.
Earlier this year, Bankers Petroleum came under fire after an incident involving the explosion of two oil wells forcing the evacuation of some sixty local households. The authorities also questioned if the country’s largest foreign investor and exporter has paid all its taxes.
Since 2004, Bankers operates and has the full rights to develop the Patos-Marinza and Kuà§ova heavy oilfields under a 25-year concession contract with the Albanian government. The Patos-Marinza oilfield is the largest onshore oilfield in continental Europe, holding approximately 5.4 billion barrels of original oil in place. The Kuà§ova field has 297 million barrels of original-oil-in-place.
