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by Stockwatch Business Reporter

West Texas Intermediate crude for December delivery lost 15 cents to $40.39 on the New York Merc, while Brent for January added 48 cents to $44.66 (all figures in this para U.S.). Western Canadian Select traded at a discount of $15.10 to WTI ($25.29), unchanged. Natural gas for December lost 13.1 cents to $2.145. The TSX energy index lost 3.29 points to close at 174.90.

Abby Badwi's Bankers Petroleum Ltd. (BNK) lost 45 cents to $1.65 on 12.1 million shares, as investors scattered before Albania's taxman. The tax department has frozen Bankers' Albanian bank accounts until the company coughs up $75-million (U.S.). This tax dispute began last year, after Bankers, which is the largest producer and foreign investor in Albania -- it produces about 19,000 barrels of oil a day and makes up 6 per cent of the gross domestic product, by management's estimates -- received an unpleasant audit report from the National Agency for Natural Resources. The report contained findings that could lead to a $303-million (U.S.) (later revised to $251-million (U.S.)) reduction to Bankers' cost recovery pool. The agency essentially disagreed with the way that Bankers was recording hundreds of millions of expenditures. The cost recovery pool represents deductions for income taxes, so the reduction would put Bankers in a taxable position. The government thus demanded taxes of $57-million (U.S.). Bankers disagreed with the assessment and said it would defend its recording methods. Two months ago, the parties agreed to hire an international auditor, and on Oct. 1, Albanian courts deferred the $57-million (U.S.) assessment until the audit was finished. (This should be in "a couple of months," Bankers' management said during a conference call on Oct. 7.) Now, the taxman has apparently appealed the court ruling, and the assessment has gone up to $75-million (U.S.) because of penalties and interest. Bankers has applied for an injunction through the International Chamber of Commerce to protect itself while the audit continues. It emphasizes that even though its Albanian bank accounts are frozen, it did not have much money in them anyway, so there is no effect on field operations. Investors are not nearly as sanguine. Bankers has long touted its friendly relationship with the Albanian government as a huge advantage, and this relationship seems to be fraying.

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