TIRANA, May 11 – Canada-based Bankers Petroleum suffered a drastic cut in profits in the first quarter of this year when its net income dropped by 96 percent year-on-year as international oil prices halved.
In a quarterly report on its financial and operational results, Bankers Petroleum, which operates the Patos-Marinza heavy oilfield and is the country’s biggest foreign investor, said its net income for the first quarter of this year dropped to a mere $879,000, down from a record of around $25 million during the first quarter of 2014 when oil prices were at a record high.
With average sales up by 10 percent to 20,283 barrels of oil per day, the company’s poor financial performance was affected by average Brent oil prices at around $54/barrel, 50 percent less compared to the first quarter of 2014.
The low oil prices also affected royalties to the Albanian government.
“Royalties to the Albanian Government and related entities during the first quarter of 2015 were $10 million (14% of revenue) compared to $16 million (15% of revenue) for the previous quarter and $22 million (15% of revenue) for the first quarter of 2014,” the company said in a statement.
Bankers says it intends to drill eleven horizontal wells in the second quarter of 2015 of which nine in the core of the Patos-Marinza field, one in Kuçova and one horizontal water disposal well.
An incident involving the explosion of two oil wells in southwestern Albania which forced the evacuation of some sixty local households in early April 2014, made Canada-based Bankers Petroleum come under fire with government authorities questioning whether the country’s largest foreign investor is making a good job and paying all its taxes.
Affected households have been continuously staging protests against Bankers Petroleum demanding compensation and relocation following official measurements showing the area has become highly contaminated, severely damaging agricultural products which they rely on.
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.
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.
Canada-based Bankers Petroleum posted record high profits of around $129 million in 2014, more than double compared to 2013, on higher oil production despite a significant cut in international oil prices in the second half of the year. Meanwhile, royalties to the Albanian government and related entities were $86 million (15 percent of revenue) during 2014 compared to $94 million (17 percent of revenue) for 2013.
Bankers Petroleum 2015 prospects are less optimistic as international oil prices have more than halved to around $54 a barrel since their peak level in mid-2014, forcing the company to revise downward its 2015 program of investments and production.
In early February 2015, Bankers announced it had reduced its 2015 capital program to US$ 153 million, down from a previously announced 2015 capital program of $218 million in early December 2014.
Since 2004, Bankers operates and has the full rights to develop the Patos-Marinza and Kuçova 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 Kuçova field has 297 million barrels of original-oil-in-place.
