TIRANA, Nov. 10 – Canada-based Bankers Petroleum, which operates the Patos-Marinza heavy oilfield in southwest Albania, returned to modest profits in the third quarter of 2015 when it reduced costs to handle the sharp decline in international oil prices.
Bankers Petroleum, the country’s biggest foreign investor and exporter, reported a net income of U.S.$4.77 million in the first three quarter of this year, down 94 percent compared to the same period last year when international oil prices hit a record high.
In an unusual situation since a decade of operations in Albania, Bankers Petroleum reported losses of about $9.6 million in the first half of this year, compared to record profits of $52 million during the same period.
David French, the CEO of Bankers Petroleum, described the third quarter results as the company’s ability to perform in a challenging oil environment.
“We have reduced our costs by $8 per barrel since 2013 and reached combined levels of operating costs and sales and transportation costs not rivaled since 2009. Our improved cost structure, along with the success of our enhanced oil recovery program gives Bankers the ability to achieve more with less capital headed into 2016,” he said.
Average oil production and sales in the first three quarters of this year was at 19,800 barrels of oil per day (bopd), slightly down compared to 20,700 bopd in 2014.
A 50 percent drop in international oil prices also severely affected royalties collected by the Albanian government. Royalties to the Albanian government for the first three quarters of 2015 dropped to $33 million, 14 percent of revenue, compared to $70 million, 15 percent of revenue, for the same period in 2014.
The company says flash flooding and power outages in the Patos-Marinza field in early October temporary reduced production levels by an average of 1,000 bopd but the company anticipates exiting the year with an 18,500 to 19,000 bopd production rate.
Last September, Canada-based Bankers Petroleum and the Albanian government 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.
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.
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.
