Tullow Disappointed By London Tribunal Ruling Over $196.5 Million Ghana Tax Assessment

Africa-focused independent oil producer Tullow Oil Plc described as disappointing a decision by an International Chamber of Commerce tribunal in London rejecting its challenge to a corporate income tax assessment covering its operations in Ghana from 2016 to 2019.

Tullow expressed its disappointment in a notice to investors and shareholders following the tribunal’s ruling on Tuesday.

“Tullow is disappointed that the Tribunal has come to this decision and will now consider next steps after further engagement with the Government of Ghana,” the company said.

Tullow did not disclose what further action it may pursue but said it would provide an update in due course.

Tullow had taken the government of Ghana, represented by the Ghana Revenue Authority (GRA), to the tribunal in London to challenge a $196.5 million corporate income tax assessment relating to proceeds it received from 2016 to 2019 under its corporate business interruption insurance policy.

The tribunal ruled that the $196.5 million tax assessment did not breach the petroleum agreements between Tullow and the Ghanaian government.

It also determined that the 100% penalties imposed on the assessment fell outside the contractual protections contained in Tullow’s petroleum agreements.

The ruling means Tullow’s argument that the assessment was inconsistent with those contractual protections was not upheld by the tribunal.

Ghana’s government, through Finance Minister Cassiel Ato Forson, welcomed the ruling and commended the Office of the Attorney-General, the GRA and Ghana’s external legal counsel, Foley Hoag LLP, for defending Ghana’s position throughout the arbitration.

Despite the outcome, the government said it remained open to resolving outstanding tax matters with Tullow through engagement.

Forson said discussions between the two sides had already begun before the tribunal delivered its award.