* Albania says to renegotiate contracts with oil companies
* Wants to impose limit on cost recovery
* Companies only pay 50 pct profit tax after covering costs
* Albania in continuing tax dispute with Bankers Petroleum (Adds comment from Bankers Petroleum)
By Benet Koleka
TIRANA, Jan 20 (Reuters) - Albania will renegotiate its oiloutput-sharing contracts with Bankers Petroleum andother oil companies and impose a limit on expenses that can beused to offset their tax liability, Energy Minister DamianGjiknuri said on Wednesday.
The Balkan state has accused corporations of understatingprofits made in the country to avoid its 50 percent profit tax.The dispute stems from a clause in the contracts that allows thecompanies' operating costs to be set against the tax.
Gjiknuri said that Albania has not been paid any profit taxby the companies, only royalties.
Canadian firm Bankers Petroleum agreed to pay $57 million ininstalments -- covering what Albania said was owed for 2011 --so it could gain control of its Albanian bank accounts while itseeks a final solution through a third-party auditor or thecourts.
"We shall renegotiate some of the current contracts,including Albania's biggest contract -- Bankers Petroleum,"Gjiknuri told a meeting of the Extractive IndustriesTransparency Initiative (EITI), adding that the goal is tochange the terms once some of the ongoing disputes over theprofit tax have been settled.
Referring to Bankers Petroleum payments, Gjiknuri said thelocal agencies had worked hard to detail the real spending inthe oil industry and to help to put a cap on the firms' costrecovery.
Bankers Petroleum CEO David French said the company is in anopen, working dialogue with the Albanian government on a numberof items, primarily in relation to resolving the recent taxdispute.
"As an important contributor to the Albanian economy, thecompany will always be a part of discussions for a long-termframework of growth and investment in Albania," French added inhis statement to Reuters.
Bankers Petroleum extracts crude from the Patos Marinzaoilfield, the biggest in Albania, and the Kucova oilfield.
In the contracts being negotiated with Royal Dutch Shell and Israeli's Delek Group, Albania isimposing a ceiling on costs for the first time, Gjiknuri said.
"This means that a portion of the oil, before the companyrecovers the costs, will be divided for profit. The oil to besplit between the state and the private entity will flow fromthe first barrel to help the state get more than now." (Editing by Elaine Hardcastle and David Goodman)
