Tullow disappointed by ICC ruling on Ghana tax dispute

Tullow Oil plc says it is disappointed by an International Chamber of Commerce (ICC) Tribunal ruling that rejected its challenge to a corporate income tax assessment arising from business interruption insurance proceeds received in Ghana.

The dispute relates to proceeds Tullow received between 2016 and 2019 under its corporate business interruption insurance policy.

In its ruling, the ICC Tribunal determined that the US$196.5 million tax assessment did not breach the Petroleum Agreements between Tullow and the Government of Ghana.

The Tribunal also found that the 100% penalties imposed on the assessment fell outside the contractual protections provided under the Petroleum Agreements.

In a statement, Tullow said it would consider its options following further discussions with the Government of Ghana.

“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.

The oil producer did not indicate what further action it may take, but said it would provide an update in due course.

The ICC arbitration was part of Tullow’s challenge to the tax assessment and its argument that the assessment was inconsistent with the protections contained in its Petroleum Agreements with Ghana.

The ruling means the Tribunal did not accept Tullow’s position that the assessment breached those contractual protections.

Government says broader tax assessment upheld

The ICC ruling comes as the Government of Ghana maintains that the arbitration also upheld a broader Ghana Revenue Authority (GRA) tax assessment of US$393.09 million.

Finance Minister Dr Cassiel Ato Forson said the Tribunal dismissed Tullow’s claims and upheld the GRA’s assessment in full.

According to the government, the Tribunal also determined that the assessment was not time-barred, that the penalty imposed by the GRA was properly applied, and that the Authority’s enforcement action was lawful.

The government is now preparing to implement the award in accordance with Ghanaian law.

Dr Ato Forson commended the Office of the Attorney-General, the GRA and Ghana’s external legal counsel, Foley Hoag LLP, for their roles in defending Ghana’s position throughout the arbitration.

Despite the ruling, the government says it remains willing to engage Tullow to resolve outstanding tax matters amicably.

Dr Ato Forson disclosed that discussions between the government and Tullow were already underway before the Tribunal delivered its award.

The latest development therefore leaves the two sides continuing their engagement, with Tullow weighing its next steps following the Tribunal’s decision.

Source: Sekunde FM