In this paper, the expressions that define compressibility of hydraulic medium are used to develop a nonlinear spring-like model for a hydraulic actuator. Using this model, an energy based controller for passive bilateral tele-operation of hydraulic actuator is designed. The control problem is posed to achieve power amplification from the master to the slave. The unknown external forces on the slave system are assumed to be constant and are estimated using techniques from direct adaptive control. Efficacy of the controller is evaluated by implementing it on a single degree-of-freedom setup. Experimental results demonstrate good co-ordination characteristics both in free space and when encountering a hard surface.