Tirana Times, February 25 2026 – Domestic governance gaps are the primary entry points through which foreign actors can generate corrosive outcomes in strategic sectors. The Bankers Petroleum illustrates how this happens: when fiscal terms are unclear, cost verification is weak and enforcement is irregular, revenue disputes can last for years, regardless of who owns the company.
Albania’s investigation into Bankers Petroleum Albania Ltd. is often narrated as a “China case” because the operator has been Chinese-owned since 2016.[1] Ownership matters, but it is not the policy core. The case provides insight into Albania’s ability to govern a strategic, high-value asset through predictable fiscal rules and routine verification, rather than secrecy, technical asymmetry and episodic enforcement.
In July 2025, prosecutors announced precautionary measures against company executives and alleged long-term cost inflation, profit suppression, and fraudulent VAT claims.[2] These allegations remain unproven, and the presumption of innocence applies. From a policy perspective, the main lesson is structural. In production-sharing systems, public revenue depends heavily on the state’s ability to verify recoverable costs. When this capacity is weak, prolonged disputes are likely.[3]
At the same time, Albania’s economic exposure to China is increasingly visible in essential imports, especially machinery and equipment. This raises the cost of disruption and makes strong, rule-based governance in China-linked strategic assets more important.[4] The policy priority is therefore institutional. It is to limit discretion, strengthen verification, and normalize oversight so accountability does not depend on political cycles or investor nationality.
Background
Bankers Petroleum has operated the Patos-Marinza oilfield under a production-sharing agreement (PSA) since 2004.[5]Patos-Marinza is a major onshore asset in Albania, making the operator’s fiscal, environmental and governance footprint politically relevant beyond the energy sector.[6]
Most Albanian crude is exported for refining abroad. Albania’s 2016 EITI report estimates that around 87 percent of crude output was exported in 2016, mainly to Western European markets, with Italy as the primary importer.[7] This matters because it clarifies what the Bankers asset is and is not. It is a high-value domestic revenue and governance issue, but it is not a major lever of physical energy supply for China.
The scale comparison reinforces this point. Albania’s 2016 crude output (about 1.034 million tons / approx. 19 kb/d) is negligible relative to China’s crude import volumes (about 7.6 million b/d in 2016), This makes Geo-Jade’s 2016 acquisition easier to interpret as a commercial upstream investment and a portfolio asset, rather than a move to secure meaningful physical supply for the Chinese domestic market.
Ownership changed in 2016, when affiliates of Geo-Jade Petroleum agreed to acquire Bankers Petroleum for approximately USD 575 million.[8] The acquisition locked the new owner into an existing contractual and administrative framework that had been shaped under previous ownership.[9] Policy analyses have since used the case to illustrate how Chinese acquisitions of legacy assets can expose governance weaknesses in EU-accession countries,[10] while broader strategic assessments place it within debates on how NATO members and partners[11] manage China’s growing presence in strategic economic sectors.[12]
The current enforcement cycle began with a referral from the tax investigation directorate and the opening of a criminal case in December 2024. Prosecutors later stated that the investigation covered 2004-2024 and alleged that the company consistently declared losses despite large oil export and domestic sales.[13] According to the prosecution’s public statement, recorded sales over the period totalled ALL 532.4 billion (€5.50 billion), while declared cumulative losses reached ALL 11.7 billion (€121 million), alongside alleged fraudulent VAT reimbursement schemes.[14] These claims will be tested in court and remain allegations under the presumption of innocence.
From a policy perspective, however, the case reveals a more fundamental problem: governance in Albania’s strategic sectors has been built on confidential contracts, hard-to-verify cost calculations and wide administrative discretion. When costs cannot be reliably verified, disputes focus on accounting definitions rather than performance, making conflicts lengthy, politicized and expensive.
Analysis of China’s Presence and Influence
This analysis answers three questions in sequence: (1) What does China’s broader economic footprint in Albania look like today? (2) Why does Bankers matter for understanding China-related risk? (3) Which institutional mechanisms allow contested fiscal outcomes to persist for years?
1) China’s economic exposure is increasingly visible in Albania’s import basket (especially inputs)..
INSTAT’s foreign-trade analyses for January to November show a widening imbalance with China. Exports to China were around ALL 10.0 billion (€103 million) in Jan-Nov 2024 and around ALL 9.9 billion (€102 million) in Jan-Nov 2025. Imports rose from ALL 87.3 billion (€903 million) to ALL 107.1 billion (€1.11 billion) over the same periods.[15] This pushed the bilateral deficit from roughly ALL 77.4 billion (€801 million) to ALL 97.1 billion (1.00 billion), which is an increase of about one quarter.[16]
The import composition helps explain why this matters for economic resilience. China’s largest import category in the INSTAT breakdown is “Machinery, equipment and spare parts,” rising from ALL 43.3 billion (€448 million) (Jan-Nov 2024) to ALL 53.0 billion (€549 million) (Jan-Nov 2025).[17] Other sizeable categories include construction materials and metals (ALL 11.7-17.5 billion / €121-181 million) and textiles and footwear (ALL 13.1-14.3 billion / €135-148 million).[18] These are not marginal consumer items; they are inputs for production, infrastructure and logistics. The point is not that importing from China is a problem. The risk is concentration. If a large share of essential inputs comes from one source, any disruption becomes more costly and harder to manage. This makes predictable, rule-based governance in China-linked strategic assets even more important.
2) Bankers is a China-linked governance test, not a nationality-only story.
Chinese ownership increases the reputational sensitivity of governance failures in the Bankers case, particularly for Albania as an EU accession country and NATO ally.[19] In policy debates, the rule-based management of Chinese-owned strategic assets is therefore treated as an indicator of institutional resilience.[20] By contrast, the governance weaknesses exposed in the case originate primarily in domestic contract design, audit capacity and enforcement routines rather than in the investor’s nationality.
The central policy risk lies in how the case is framed. Treating it primarily as a “China problem” tends to produce symbolic responses, selective enforcement, or improvised bargaining rather than durable solutions. These outcomes weaken both credibility and investment predictability. Framed instead as a verifiability problem, that is, a situation in which regulators lack the tools, data access and independent checks needed to reliably verify operators’ cost claims and contractual compliance, then reform becomes implementable. The same transparency, audit and oversight mechanisms that would constrain a Chinese operator would then apply equally to any operator.
3) Why contested fiscal outcomes persist: three domestic governance entry points
The Bankers file becomes analytically clearer when the focus shifts from corporate behavior to incentives created by the fiscal framework. Three mechanisms are decisive.
First, cost-recovery architectures make verification capacity the binding constraint. In production-sharing contracts, the operator can recover eligible “petroleum costs” out of production before profits are calculated and shared with the state; the broader and harder-to-audit these costs are, the more government take is deferred.
In Bankers’ 2010 Block F PSA, the Accounting Procedure defines recoverable costs broadly, (covering operating and capital spending and, under specified conditions, certain governmental payments and taxes), which makes the quality and timeliness of auditing decisive for fiscal outcomes.[21] Where costs can be expansively defined and audits are delayed, taxable profit can remain minimal even under sustained production, which turns cost verification into the central distributional contest. The implication is not misconduct per se, but a governance design in which revenue outcomes depend less on production performance than on the state’s capacity to verify and contest cost claims, effectively shifting fiscal risk from geology to institutions.[22]
Second, confidentiality and technical asymmetry narrow accountability.[23] When core contractual clauses, cost documentation and audit trails are difficult to access and contest, oversight tends to become reactive rather than routine.[24] As a result, parliamentary scrutiny and independent audit follow-up often operate on partial information, while the operator retains a structural evidentiary advantage.[25]
Third, episodic enforcement allows tax disputes to persist over time.[26] When contested tax treatments are not addressed early, they tend to become normalized and harder to reverse without escalation.[27] In the Bankers case, this dynamic is visible in the customs dispute that resulted in a €120 million fine in 2019, which later became politically sensitive and contested.[28] Separately, unresolved cost-recovery disputes moved into international arbitration, culminating in an ICC final award in 2024.[29] Public reporting indicates that the final award largely upheld Bankers Petroleum’s position on cost recovery, limiting the state’s claims and reinforcing the perception that delayed and fragmented enforcement weakened Albania’s negotiating leverage once disputes were transferred to arbitration.
4) SPAK and the rule-of-law signal
The Bankers case also tests Albania’s justice reform architecture. SPAK, established under the 2016 constitutional reform, functions as the specialized prosecution for high-level corruption and organized crime,[30] while the Special Courts, created under the same framework, became operational in 2019.[31] In 2025, local media reported that the Fier Prosecution declared lack of competence and transferred aspects of the Bankers file to SPAK after evidence allegedly implicated senior officials.[32] The European Commission has repeatedly treated the functioning and track record of these bodies as central to Albania’s rule-of-law progress in the EU accession process.[33]
Key Findings
Taken together, the Bankers case should be read as a strategic-sector governance test rather than a routine corporate tax dispute.[34] Bankers’ dominant position in Albania’s oil production means that any sustained fiscal controversy around the operator has state-level implications for public revenue credibility, regulatory authority and the integrity of Albania’s investment framework.[35] Official allegations also highlight a well-documented vulnerability of production-sharing systems: where cost verification is weaker than the operator’s information advantage, disputes over recoverable expenditure can persist for extended periods, with fiscal outcomes shaped by delay and procedural complexity rather than timely correction[36] This vulnerability becomes more consequential when transparency is limited and technical complexity restricts access to core contractual terms, cost categories and audit trails.[37] In such settings, accountability is narrowed and problems are more likely to surface late as crises rather than early through routine auditing and course correction.[38]
This governance exposure is amplified by the wider economic context. This governance exposure is amplified by the wider economic context. INSTAT data suggest that Albania’s exposure to China is increasingly input‑oriented, especially in machinery, equipment and construction materials, which raises the domestic adjustment cost when projects are disrupted or delayed, because these inputs are not easily substituted in the short run. This is not an argument about retaliation or “economic coercion,” but about concentration risk and the practical cost of sudden disruption. In parallel, episodic enforcement tends to encourage escalation into arbitration and political bargaining, rather than producing predictable compliance through routine administrative tools. Durable reform therefore depends on institutionalizing verification and enforcement as continuous functions rather than exceptional interventions[39], a conclusion repeatedly emphasized in analyses of regulatory capacity and enforcement effectiveness.[40] Finally, while Chinese ownership has been shown to raise reputational stakes and influence how such cases are interpreted externally,[41] the underlying weakness exposed by the Bankers case lies in institutional discretion over how rules are designed, applied and verified, rather than in investor nationality.[42]
Policy Recommendations
The policy objective is straightforward: make fiscal outcomes verifiable and enforcement routine in strategic sectors. The point is not to screen investors by nationality, but to reduce discretion by setting clear rules, carrying out regular cost audits, and linking data systems so that misconduct is constrained regardless of who owns the company. In practice, this begins with contract and rule transparency. Albania should publish the fiscal core of petroleum agreements or, where full publication is constrained, issue standardized public summaries, so that cost-recovery definitions, audit rights, stabilization clauses, key amendments and dispute-resolution pathways are publicly legible and comparable across cases.[43] Contract transparency is increasingly treated as a governance norm in the extractive sector, precisely because it reduces the space in which fiscal outcomes can be shaped by confidentiality and bargaining rather than by rules.[44]
Transparency, however, is only meaningful if it is matched by capacity. Albania should therefore build specialized cost-verification capability by establishing a technically staffed unit (petroleum accounting, engineering, forensic audit) with authority to review recoverable costs on a rolling basis, impose deadlines, and translate findings into enforceable fiscal adjustments. Alongside this, VAT refund governance should be modernized through integrated digital cross-checks: reconciliation between VAT claims, customs declarations, and e-invoicing should be automated and sector-specific risk indicators should be added for strategic industries so that anomalies are flagged early without blocking legitimate liquidity.[45]
Finally, reforms should focus on the operational areas where fiscal leakage most often occurs in strategic sectors. Albania should regularly review excise- and duty-sensitive inputs, such as diluent, by checking whether import volumes match verified operational needs and production data, including along procurement chains and through intermediaries.[46]Transparency around contractors should be improved by requiring key contractors and subcontractors to disclose who ultimately owns them and by paying closer attention to service chains where overbilling or hidden value transfers are most likely. To depoliticize oversight and increase predictability, Albania should also define clear triggers for heightened scrutiny based on integrity risk, including data verifiability, compliance history and internal controls. Also, it must align procedures with EU-accession benchmarks, so enforcement is defensible, consistent and resistant to ad hoc political intervention.[47]
Conclusion
The Bankers proceedings will be decided through legal processes, and the presumption of innocence applies. Yet the governance lesson is already visible: when strategic sectors are governed through limited transparency, technical asymmetry and discretionary enforcement, fiscal disputes tend to persist and corrective action is often delayed and politicized,[48] a pattern widely discussed in analyses of governance and investor confidence.
If Albania converts this episode into routine, verifiable oversight, based on transparent fiscal terms, continuous cost auditing and integrated VAT and customs controls, it can protect public revenue and improve investor predictability,[49] thereby strengthening its credibility with a broader set of investor partners.
by Nora Ahmeti and Vilson Blloshmi
This article was produced within the project “China Policy Impact: Countering China’s Expanding Footprint in South-East Europe,” in cooperation ESTIMA and AIIS and supported by the National Endowment for Democracy (NED). The content is the sole responsibility of AIIS and does not necessarily reflect the views of ESTIMA or NED.
[1] Reuters, (2016), “Canada’s Bankers Petroleum agrees to takeover by Chinese firm,”, https://www.reuters.com/article/business/canadas-bankers-petroleum-agrees-to-takeover-by-chinese-firm-idUSKCN0WM0WS/.
[2] Office of the Prosecutor General (Albania), (2025), , “Bankers Petroleum Albania Ltd Evaded Taxes by Declaring Losses for 20 Years; Fier Prosecution Issues 14 Precautionary Measures, Executes 9, Declares 5 Wanted,” press release, https://www.pp.gov.al/Media_en/Press_Release/Bankers_Petroleum_Albania_Ltd_Evaded_Taxes_by_Declaring_Losses_for_20_Years_Fier_Prosecution_Issues_14_Precautionary_Measures_Executes_9_Declares_5_Wanted.html.
[3] EITI, Glossary entries for “Production sharing contract” and “PSA” (definitions of production-sharing arrangements and key terms), https://eiti.org/fr/node/25490?letter=P&page=1.
[4] INSTAT (Albania Institute of Statistics, (2025), “Foreign Trade in Goods, November 2025,” https://www.instat.gov.al/media/b0chkchl/tj-nentor-2025-ang.pdf.
[5] U.S. Department of Commerce (2004), “Albania – Oil and Gas,” listing production-sharing agreements including Patos Marinza, https://legacy.export.gov/article?id=Albania-Oil-and-Gas.
[6] Métois, M. et al., (2020), “Anthropogenic subsidence in the Patos-Marinza oil field (Albania) from Sentinel-1 InSAR time series,” pp. 363-377, https://se.copernicus.org/articles/11/363/2020/.
[7] World Bank (2015), Project Paper 2015, noting Bankers’ share of Albania’s oil production in 2014, https://documents1.worldbank.org/curated/en/568071468007244960/pdf/PIDC46980.pdf
[8] Reuters, (2016), “Canada’s Bankers Petroleum agrees to takeover by Chinese firm,” https://www.reuters.com/article/business/canadas-bankers-petroleum-agrees-to-takeover-by-chinese-firm-idUSKCN0WM0WS/.
[9] EITI Albania, (2018), 2016 Albania EITI Report, https://eiti.org/sites/default/files/attachments/2016_albania_eiti_report.pdf
[10] NATO, (2009), “NATO member countries”, https://www.nato.int/en/about-us/organization/nato-member-countries
[11] European Commission (2025), , “Albania 2025 Report,” https://enlargement.ec.europa.eu/document/download/fe9138b7-90fe-4277-a12c-3a03f6d1957f_en?filename=albania-report-2025.pdf.
[12] European Parliament Research Service (2022), “China’s strategic interests in the Western Balkans,”,https://www.europarl.europa.eu/RegData/etudes/BRIE/2022/733558/EPRS_BRI%282022%29733558_EN.pdf.
[13] Office of the Prosecutor General (Albania), (2025), “Bankers Petroleum Albania Ltd Evaded Taxes by Declaring Losses for 20 Years; Fier Prosecution Issues 14 Precautionary Measures, Executes 9, Declares 5 Wanted,”https://www.pp.gov.al/Media_en/Press_Release/Bankers_Petroleum_Albania_Ltd_Evaded_Taxes_by_Declaring_Losses_for_20_Years_Fier_Prosecution_Issues_14_Precautionary_Measures_Executes_9_Declares_5_Wanted.html.
[14] Office of the Prosecutor General (Albania), (2025), “Bankers Petroleum Albania Ltd Evaded Taxes by Declaring Losses for 20 Years; Fier Prosecution Issues 14 Precautionary Measures, Executes 9, Declares 5 Wanted,”https://www.pp.gov.al/Media_en/Press_Release/Bankers_Petroleum_Albania_Ltd_Evaded_Taxes_by_Declaring_Losses_for_20_Years_Fier_Prosecution_Issues_14_Precautionary_Measures_Executes_9_Declares_5_Wanted.html.
[15] INSTAT (Albania Institute of Statistics), (2025), “Foreign Trade in Goods, November 2025,” https://www.instat.gov.al/media/b0chkchl/tj-nentor-2025-ang.pdf.
[16] Ibid.
[17] Ibid.
[18] Ibid.
[19] NATO, (2009), “NATO member countries”, https://www.nato.int/en/about-us/organization/nato-member-countries
[20] Ibid.
[21] EITI, Glossary entries for “Production sharing contract” and “PSA” (definitions of production-sharing arrangements and key terms), https://eiti.org/fr/node/25490?letter=P&page=1.
[22] Bankers Petroleum Albania Ltd., Bankers Production Sharing Contract, Block F PSA, (2010)
[23] Ibid.
[24] Ibid.
[25] EITI (2024), “Contracts and licenses”, https://eiti.org/guidance-notes/contracts-and-licenses.
[26] Top Channel (Albania), (2019), “Bankers Petroleum, 120 million EUR fine for tax evasion,” https://top-channel.tv/english/bankers-petroleum-120-million-eur-fine-for-tax-evasion/.
[27] Ibid.
[28] Global Arbitration Review,(2024), “ICC tribunal decides Albanian oil field dispute,” https://globalarbitrationreview.com/article/icc-tribunal-decides-albanian-oil-field-dispute.
[29] Bankers Petroleum Albania, (2024), “ICC Tribunal issues Final Award in Cost-Recovery Arbitration,” company statement, https://bankerspetroleum.com/icc-tribunal-issues-final-award-in-cost-recovery-arbitration/
[30] Republic of Albania, Law No. 95/2016 “On the Organization and Functioning of Institutions for Combating Corruption and Organized Crime” (English translation), via EU4Justice, https://eu4justice.al/wp-content/uploads/2025/08/6.-LAW-NR-95-2016-1.pdf.
[31] Chr. Michelsen Institute (CMI), Iva Gunjic, (2019), “Albania’s Special Courts against Corruption and Organised Crime”, https://www.cmi.no/publications/file/8124-albanias-special- courts-against-corruption-and-organised-crime.pdf
[32] BalkanWeb, (2025), “Fier Prosecutor’s Office declares incompetence for ‘Bankers Petroleum’ file; case transferred to SPAK”, https://www.balkanweb.com/en/prokuroria-e-fierit-shpall-moskompetence-per-bankers-petroleum-ceshtja-i-kalon-spak-ut-si-shmangu-kompania-tatimet-per-20-vite/.
[33] European Commission (2025), “Albania 2025 Report,” Commission Staff Working Document SWD(2025) 750 final, https://enlargement.ec.europa.eu/document/download/fe9138b7-90fe-4277-a12c-3a03f6d1957f_en?filename=albania-report-2025.pdf.
[34] EITI Albania, (2018), 2016 Albania EITI Report, https://eiti.org/sites/default/files/attachments/2016_albania_eiti_report.pdf
[35] World Bank, (2015), Project Paper, noting Bankers’ share of Albania’s oil production in 2014, https://documents1.worldbank.org/curated/en/568071468007244960/pdf/PIDC46980.pdf
[36] Office of the Prosecutor General (Albania), (2025), “Bankers Petroleum Albania Ltd Evaded Taxes by Declaring Losses for 20 Years; Fier Prosecution Issues 14 Precautionary Measures, Executes 9, Declares 5 Wanted,” press release,https://www.pp.gov.al/Media_en/Press_Release/Bankers_Petroleum_Albania_Ltd_Evaded_Taxes_by_Declaring_Losses_for_20_Years_Fier_Prosecution_Issues_14_Precautionary_Measures_Executes_9_Declares_5_Wanted.html.
[37] ResourceContracts.org, “Albpetrol Sh.A., Bankers Petroleum Albania Ltd., Patos-Marinza Petroleum Agreement (as amended),” contract text (including provisions treating certain taxes as petroleum costs under tax-change
[38] EITI (2024), “Contracts and licenses”, https://eiti.org/guidance-notes/contracts-and-licenses.
[39] Top Channel (Albania), (2019), “Bankers Petroleum, 120 million EUR fine for tax evasion,” https://top-channel.tv/english/bankers-petroleum-120-million-eur-fine-for-tax-evasion/.
[40] Global Arbitration Review, (2024), “ICC tribunal decides Albanian oil field dispute,” https://globalarbitrationreview.com/article/icc-tribunal-decides-albanian-oil-field-dispute.
[41] Reuters, (2016), “Canada’s Bankers Petroleum agrees to takeover by Chinese firm,”https://www.reuters.com/article/business/canadas-bankers-petroleum-agrees-to-takeover-by-chinese-firm-idUSKCN0WM0WS/.
[42] European Parliament Research Service, (2022), “China’s strategic interests in the Western Balkans,” https://www.europarl.europa.eu/RegData/etudes/BRIE/2022/733558/EPRS_BRI%282022%29733558_EN.pdf.
[43] EITI (2024), “Contracts and licenses”, https://eiti.org/guidance-notes/contracts-and-licenses
[44] Ibid.
[45] Office of the Prosecutor General (Albania), (2025), “Bankers Petroleum Albania Ltd Evaded Taxes by Declaring Losses for 20 Years; Fier Prosecution Issues 14 Precautionary Measures, Executes 9, Declares 5 Wanted,” press release,https://www.pp.gov.al/Media_en/Press_Release/Bankers_Petroleum_Albania_Ltd_Evaded_Taxes_by_Declaring_Losses_for_20_Years_Fier_Prosecution_Issues_14_Precautionary_Measures_Executes_9_Declares_5_Wanted.html.
[46] Top Channel (Albania), (2024), “Bankers Petroleum, 120 million EUR fine for tax evasion,” https://top-channel.tv/english/bankers-petroleum-120-million-eur-fine-for-tax-evasion/.
[47] European Commission, “(2025), Albania 2025 Report,” Commission Staff Working Document SWD(2025) 750 final, https://enlargement.ec.europa.eu/document/download/fe9138b7-90fe-4277-a12c-3a03f6d1957f_en?filename=albania-report-2025.pdf.
[48] Ibid.
[49] European Parliament Research Service, (2022), “China’s strategic interests in the Western Balkans,” Briefing,https://www.europarl.europa.eu/RegData/etudes/BRIE/2022/733558/EPRS_BRI%282022%29733558_EN.pdf.
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