Bankers Petroleum on winning side of $57M tax dispute with Albania

Reid Southwick, Calgary Herald

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Published on: August 29, 2016

A Calgary-based oil and gas producer that operates in eastern Europe emerged victorious in a long-standing dispute with the Albanian government over a $57-million tax bill.

The dispute began with an Albanian government audit of Bankers Petroleum Ltd.’s books in 2011 that questioned $250 million in expenses, resulting in a $57-million tax levy.

At one point, the country’s tax department froze Bankers’ Albanian bank accounts, which it used to pay local suppliers, as part of efforts to collect the tax along with interest and penalties that pushed the total to $75 million.

The feuding parties ultimately agreed to have the expense and resulting tax reviewed by a third-party panel of auditors. Bankers said Monday the panel found the company had correctly recorded its 2011 expenses and was not required to pay the disputed tax.

The decision is binding, which means the Albanian government must abide by it, Bankers said. The Albanian government is expected to determine some mechanism to reimburse the company for the funds it has paid on the tax so far. As of June 30, Bankers had paid $37 million as a deposit.

Chinese oil and gas company Geo-Jade Petroleum Corp. is seeking approvals to acquire Bankers for an estimated $575 million. The proposed transaction is being reviewed by Chinese authorities.