cost recovery 101From the Petroleum Agreement page 22
After Contractor has recovered all of its Petroleum Costs ( see definition of costs in prior post ) from the Cost Recovery Petroleum, the remaining Cost Recovery Petroleum shall be "Profit Petroleum". As its reward for the risk of conducting the Petroleum Operations under the Petroleum Agreement, Contractor shall be entitled to 100% of the Profit Petroleum.
There is a formula that is attached but I see it got garbled after I posted it. Basically, the way it goes is that once the operator gets his capital
( including operating expences back) cumulatively FIRST, then the ALBS get 50% of the "PROFIT TAX". Look at this this way. They spent $253 Million that year. (See the annual report for details) in order for the ALBS to make a claim, BNK would have had to have re-cooped $253 million CAPEX AND OPEX through sales, then made another $114 million on top of that to make good on the ALB claim of $57 million in PROFIT TAX!!! Is that crystal clear now???
They DID recieve $66 million in Royalty that year and BNK recorded a profit of $13 million on it's income statement.
THE INCOME STATEMENT FOR BNK HAS NOTHING TO DO WITH THE "PROFIT TAX" THE ALBANIAN TAX DEPARTMENT IS CLAIMING