Canada-based oil company Bankers Petroleum said on February 24 it has suspended its arbitration procedure against Albania, after reaching an agreement with the country’s energy ministry on the appointment of an international expert audit team to resolve their tax dispute.

Albania has been involved in a $75mn tax dispute with Bankers, which is the biggest investor in the country, since late 2015.

On November 30, Bankers said it had been forced to consider a phasedown of its operations in Albania after its account were frozen. However, the following month the Canadian company reached an agreement with the government in Tirana to allow it to regain access to its bank accounts in Albania and to operate the Patos-Marinza oilfield under normal conditions.

The audit is expected to start immediately and conclude within the second half of this year, Bankers said in a February 24 statement. The determination of the expert will be binding, said the statement.

The parties have also committed to using the expert's determination as the basis for certifying petroleum costs in subsequent years, including calculation of Bankers’ tax obligations for 2012.

Broadcaster Ora News reported on February 24, citing a notice from the energy ministry, that the parties have agreed to appoint independent experts from PricewaterhouseCoopers to resolve the tax dispute in connection with the audit report from 2011.

PricewaterhouseCoopers will be assisted by experts from the US-based company Navigant Consulting, which specializes in the analysis of hydrocarbon costs.

Additionally, the government of Albania and Bankers will open a dialogue on clarifying terms in the Petroleum Agreement and License Agreement and review the existing fiscal terms for changes that work for both parties, subject to resolution of the cost recovery matter, Bankers said.

In January, the ministry of energy said that Albania plans to renegotiate its contracts with Bankers and other oil companies to limit the expenditures they use to cover their tax liabilities.

Bankers operates the Patos-Marinza oilfield and has a 100% interest in both the Kucova oilfield and in Exploration Block F in Albania.

Its net operating income from Albania-based operations was nearly $100mn in the first nine-months of 2015 down by 66% from a year earlier. Nine-month average production from its Patos-Marinza and Kucova oilfields in Albania was 19,805 bopd down from 20,809 bopd in the same period in 2014.

In December 2015, Bankers announced its capital programme of $65mn mainly for its operations in Albania for 2016.