Bankers Investments Will Depend on the Arbitration De


        The investments rate and production levels of Bankers Petroleum, the biggest exporter in the country, that exploits by concession the Patos-Marinza oilfield, are affected from the low oil prices in the world markets. VP of Operations and Production of Bankers Petroleum, Mr. Guangqing Zhang declares that the commodity prices are a key factor for enabling growth for Bankers, but it is also very important to have security of the investments in Albania and timely reimbursement of VAT and other tax amounts to improve investment confidence of the new ownership group. While Bankers is still in conflict with tax department for the non-recognition of a tax liability of USD 300 million, he added that the case is in the International Arbitration and its decision will affect in the company’s investments plan.

How was the company’s performance in 2016 and during 2017?

        Mr. Zhang: Bankers went through a material ownership transaction in 2016 where the Canadian public shares on the Toronto Stock Exchange were purchased by a Chinese group, Geo Jade Petroleum, which trades on the Shanghai Exchange. The overall performance of Bankers Albanian assets, mainly Patos-Marinza oilfield, has been stable but our pace of activity and production levels have been impacted by the low oil prices in the world markets. We have reduced our capital spending accordingly to maintain a balanced program within our available cash-flow. 2016 was a very challenging year, as the oil price dropped below $30/bbl Brent for a period of time and was below $50/bbl for most of the year, which impacted our revenue. 2017 has been more stable above $50/bbl Brent, but is still a very challenging environment for sour heavy crude oil production.


Last year, you have been in tax dispute for $ 300 Million with the Tax Directorate. Can you give us the latest updates on this issue?

        Mr. Zhang:  The Expert Determination has been completed by PWC in our favor, but the ICC Arbitration Appeal process is still underway. We are expecting this to be complete before the end of the year.  Upon winning the Arbitration, the reimbursement from the Tax Office of the taxes charged under this dispute will be critical for Bankers to increase investment levels in Albania.  We are focused on finding a solution with the government on how to get effective reimbursement of these tax amounts for the benefit of all of our stakeholders including the people we employ locally, communities surrounding our operations, local service providers and domestic refineries.


What has changed in Bankers after it was bought by Geo Jade? What are the investment plans of the Chinese company in Albania?

        Mr. Zhang:  The way we operate our business in Albania has not changed significantly as a result of the ownership transfer. We have a very competent and highly effective team that will be improved with support from our new ownership group and allow us to commit to further growth in Albania. Our investments plan for Albania are being established currently and will be a balanced program where the majority of the cash-flow from our operations in Albania will be invested in Albania. Commodity prices are a key factor for enabling growth for Bankers, but it is also very important for us to have security of our investment in Albania and timely reimbursement of VAT and other tax amounts to improve investment confidence of our new ownership group and improve return on investment for the Albanian assets compared to other international assets of Geo Jade.


During the last years, oil prices have been low. How has this affected the company, its investment and profit plans?

        Mr. Zhang:  Oil prices have a major impact on our operations as we have a balanced investment plan with our cash-flow.  We had a large capital program in 2013 and 2014 and have invested over $2 billion over the 2004 to 2017 period. The potential of the Patos-Marinza oilfield is good, but sour heavy crude oil does not have significant return on investment at low oil prices.  We are testing new technologies, such as thermal techniques to heat the crude oil and improve mobility of the oil.  This may be the next big level of production increase from Patos-Marinza but can only be realized with significant investment enabled by cooperation from the government and improvement of commodity prices. The future potential is good, but we do need several things to fall into place before we can realize the growth.



After Crude Oil Auction, Albpetrol will Sell 3.6 Million Nm3 Gas


        The state owned oil company, Albpetrol, after the successful completion of the sale of 200.000 tons of crude oil that has taken place last days, it has decided to open another auction. According to the announcement made in the Public Procurement Agency, Albpetrol will open an auction sales for a quantity of 3.6 Million Nm3 gas. This quantity is extracted as an accompanying gas during the oil extraction operations, a practice that is typical in the oil resources. According to Albpetrol, the gas is produced at the Cakran-Mollaj resource.

Auction conditions

        Albpetrol announced that the price will be calculated under the formula:

        0.8 x TTF+K where:

        TTF- is the price in EUR/mwh of the accompanying gas published on the Dutch Stock Exchange and;

        K - is the value in EUR added by the Bidder on the Minimum Estimated Price.

        This is the first time, after a long time that Albpetrol will open an auction for gas sales. Delivery of the quantity to the winner will be 600.000 Nm3 within one year from signing of the contract, whereas the remaining quantity of 3 Million Nm3 will be delivered within 5 years from signing of the contract. The interested operators must submit their bids by October 3, 2017.

        From the crude oil auction, Albpetrol sold 200.000 tons of crude oil to “IZVOR 99  “ Company and has forecasted to receive over US$ 50 Million from this transaction. Two were the companies which took place in that auction and the company which provided the highest value (“IZVOR 99”) was awarded. That was the first auction made by Albpetrol this year for the sale of the crude oil.


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