By Tirana Times Staff
FIER/TIRANA, July 2, 2025 —
In a stunning development that has shaken Albania’s oil sector, police arrested the current CEO of Bankers Petroleum, Chinese national Hongping Xiao, and the company’s former director, Leonidha Çobo, during a surprise raid on the company’s headquarters in Fier on Tuesday. The arrests were part of a joint operation by the Fier Police and the General Directorate of Taxation and follow years of legal disputes, environmental concerns, and allegations of tax evasion.
Bankers Petroleum, the largest foreign investor in Albania’s hydrocarbon sector and operator of the massive Patos-Marinza oil field, is facing renewed scrutiny after authorities reportedly broke down the doors of its Fier offices in the presence of tax inspectors. According to preliminary information, the operation was triggered by unpaid fiscal obligations and multimillion-euro debts owed to the Albanian state.
The arrests come just a year after Albania won a major legal battle against Bankers Petroleum in an international arbitration tribunal under the auspices of the International Chamber of Commerce (ICC) in Paris. The tribunal rejected over $236 million in cost claims submitted by Bankers, declaring them unrecoverable and affirming Albania’s interpretation of key provisions in the 2004 Hydrocarbon Agreement.
The ruling dealt a blow to Bankers’ efforts to recoup expenses that included payments made to Canadian operations and settlements with other oil suppliers. The tribunal also criticized the company for failing to follow competitive tendering procedures for major subcontractor contracts and for inflating costs related to community engagement and land lease payments.
Financial Mismanagement Meets Legal Consequences
The Ministry of Infrastructure and Energy hailed the arbitration decision as a landmark victory, setting a precedent for fiscal transparency and governance in Albania’s oil sector. Officials now say the ruling will increase future profit taxes from Patos-Marinza and similar state-owned energy assets.
However, Tuesday’s arrests mark a significant escalation in the state’s enforcement efforts. While full details of the criminal investigation remain undisclosed, the timing of the operation suggests that the arbitration ruling may have opened the floodgates for deeper probes into Bankers’ financial and operational practices.
The company has long faced criticism from both local communities and environmental activists for alleged pollution in the Marinzë area, where its heavy oil extraction techniques have caused concern over soil and groundwater contamination. Despite past promises of environmental rehabilitation and social investment, complaints from local residents persist.
A Once-Celebrated Investor Now Embattled
Founded by Canadian investors and sold in 2016 to a Chinese consortium led by Geo-Jade Petroleum, Bankers Petroleum was once praised for revitalizing Albania’s oil sector and bringing in hundreds of millions in foreign investment. In 2011, the company signed a $34 million deal with state-owned Albpetrol to become the sole operator of the Patos-Marinza oil field — the largest onshore oilfield in continental Europe.
That agreement enabled Bankers to consolidate its control over the 44,000-acre field and promised efficiency and environmental upgrades. At the time, Albanian officials lauded the move as a success story of foreign direct investment and energy modernization.
Yet in recent years, the company has been dogged by growing tensions with the Albanian government, culminating in arbitration and now criminal charges.
Political and Economic Ramifications
The arrests have already sent shockwaves through the country’s investment community and raise broader questions about Albania’s regulatory environment and rule of law. As the government promotes its natural resources as part of a broader economic growth strategy — and as it negotiates closer ties with the European Union — the case may serve as both a cautionary tale and a moment of reckoning.
Legal analysts say the operation could also encourage other countries in the region to re-examine legacy contracts with energy companies and increase oversight of fiscal compliance.
A statement from law enforcement is expected in the coming days, as the investigation continues. For now, the arrests of Bankers Petroleum’s leadership signal a sharp turn in Albania’s approach to corporate accountability in a sector long criticized for opacity and impunity.
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