Ghana: Tullow Secures Victory Against Ghana Over $320 Million Tax Dispute

Africa focused independent oil and gas firm, Tullow Oil Plc, has secured arbitration victory against the Republic Ghana over a $320 million tax dispute that it filed before the International Chamber of Commerce (ICC) in London in 2023.

In February 2023, Tullow Ghana Limited filed requests for arbitration with the International Chamber of Commerce in London in respect of two disputed tax assessments received from the Ghana Revenue Authority (GRA).

The assessments related to the disallowance of loan interest deductions for the fiscal years 2010–2020 and proceeds received by Tullow Oil plc under Tullow’s corporate Business Interruption Insurance policy.

However, the ICC ruled that the Branch Profit Remittance Tax (BPRT) does not apply to Tullow’s operations in the Deepwater Tano and West Cape Three Points fields offshore Ghana, which include the Jubilee and TEN fields.

As a result of the Tribunal’s award, Tullow Ghana is not liable to pay the US$320 million BPRT assessment issued by the Ghana Revenue Authority and would have no future exposure to BPRT in respect of its operations under the Petroleum Agreements.

BPRT is a tax on the profits that a foreign business makes in a country and then remits (transfers) back to its parent company abroad.

Tullow continues to engage with the Government of Ghana on two further disputed tax claims, which were referred to the ICC in February 2023, with the aim of resolving these disputes on a mutually acceptable basis.

Tullow Chief Executive Officer, Rahul Dhir, said, “We are delighted with the outcome and decision of the Tribunal, which affirms our assessment and removes a material overhang from our business.

“We have continuously had confidence in the sanctity of our Petroleum Agreements and the dispute resolution process, which has now brought certainty to all parties.”

He added: “I look forward to constructive discussions with the Government of Ghana to resolve the remaining claims so that our collective focus remains on maximising value from the Jubilee and TEN fields.”

Tullow is still in discussions with the Government of Ghana to resolve two other tax claims.

Source: https://energynewsafrica.com