Bankers Petroleum, Albania to pick auditor to settle tax spat
Canada’s Bankers Petroleum has agreed with Albania’s national resources watchdog to pick a third-party auditor to resolve a tax dispute over its 2011 spending, the company and Albanian officials said on Monday.
Bankers Petroleum has been extracting oil for 11 years in the Patos-Marinza oil field under an output-sharing contract which allows it to recover costs before paying profit tax. It has paid royalties and other taxes but no profit tax.
An audit of Bankers’ books for 2011 by the Agency for National Resources (AKBN) disputed some $250 million dollars in expenditure, triggering a $57 million profit tax demand by the Finance Ministry.
The international auditor is expected to be selected in a matter of weeks but its ruling will take several months.
“This represents a significant step towards enhancing transparency in the administration and regulation of oil and gas activities in Albania,” David French, President and Chief Executive Officer of Bankers Petroleum, said in a statement.
“Bankers views this commitment by the authorities as an important milestone in the ongoing improvement of our operations,” French said, adding he expected it to resolve the tax demand dispute.
Dael Dervishi, the head of Albania’s National Resources Agency, said the two sides had agreed to turn to a third-party and take all other steps before taking the dispute to an international arbitration court.
“We agreed to allow a third party to review all the audit findings for 2011 to advise both parties, because either we were too harsh or the company was not diligent enough”, Dervishi told Reuters. The third party would tell them “which of us should give in,” he added. //Reuters