An anonymous director reports

ALBANIAN GOVERNMENT HAS NOT YET COMPLIED WITH ICC ORDER TO CEASE ENFORCEMENT OF TAX ASSESSMENT AGAINST BANKERS PETROLEUM

The government of Albania has not yet complied with the order issued by the tribunal constituted by the International Court of Arbitration of the International Chamber of Commerce to cease enforcement of the tax assessment and revoke suspension of Bankers Petroleum Ltd.'s Albanian bank accounts. The ICC tribunal issued the stop order on Nov. 21, which if complied with, would allow Bankers to operate as usual while the ICC process and third party cost recovery audit run their course. At this time, Bankers is now forced to consider a phase down of its Albanian operations since lack of access to the bank accounts will begin to restrict its ability to pay local contractors, import goods and export oil.

Late last week, the company completed payment of the required royalty tax on an export cargo ship, freeing additional storage space at the port. However, this cargo volume was restricted to 85-per-cent capacity as a result of funds limitation to pay royalty tax in excess of the pre-existing credit balance. Without access to its Albanian bank accounts, the company's ability to pay the taxes on subsequent shipments is compromised, which may force the company to curtail production toward the end of this week as available storage reaches maximum capacity.

Through some communications with various government representatives, the company received assurances that the government does intend to comply with the order. Additionally, the government has been engaged in the dispute resolution process as demonstrated by its communications with the ICC tribunal. It is expected that the government will comply with the stop order in order to continue participation in the ICC tribunal process. Bankers remains hopeful that a solution to this situation can be reached before further disruption to operations occurs.