Ghana has been awarded $393m from Tullow Oil, with the amount comprising a corporate income tax assessment of $196.5m and a 100% penalty of the same size. The Ghana Revenue Authority assessed Tullow Ghana Limited for the tax on money collected under its business interruption insurance policy from 2016 to 2019. A tribunal constituted under the International Chamber of Commerce rules found that the penalty fell outside the scope of Tullow's petroleum agreements with Ghana.
The tribunal's ruling stated that the stability and tax provisions in Tullow's petroleum agreements did not cover penalties. The assessment itself was also deemed not to breach the agreements, not time-barred, and the GRA's enforcement action was found to be lawful. Tullow expressed disappointment and will consider its next steps after further engagement with the government. The company's shares fell by 52% in London, leaving the company valued at approximately $200m, less than half the size of the award.
Tullow's financial struggles were highlighted by its $1.4bn debt and reported loss after tax of $101m for the first half of 2026. Analyst Ashley Kelty from Panmure Liberum stated that until Tullow makes progress on paying down debt, its long-term survival is uncertain. Finance Minister Dr Cassiel Ato Forson stated that Ghanaian law gives the GRA authority to determine the time and manner of assessed tax liabilities payments, with the objective of securing revenue while preserving Tullow's capacity to operate and invest in Ghana.
The government aims to tread carefully, as Tullow is the country's largest petroleum producer, operating the Jubilee and TEN fields, which contribute to domestic gas supply and upstream employment. Talks between Tullow and the government will continue, covering both the decided case and a pending dispute. The award also settles a long-held score, as Tullow had previously taken disputed assessments to arbitration in London, with Ghana winning a $320m case in January 2025.
The GRA's external counsel, Foley Hoag LLP, worked with the Office of the Attorney-General and the GRA on the case. A third dispute between Tullow and Ghana is ongoing, concerning the GRA's disallowance of loan interest Tullow deducted against taxable profit from 2010 to 2020, with a revised assessment of $190.5m listed for a tribunal hearing in 2027.
Tullow's recent activities include spending $205m to buy the FPSO Prof. John Evans Atta Mills, the vessel producing the Jubilee field's oil. The government is also trying to extend the Jubilee and TEN petroleum agreements to draw fresh investment into a declining basin. The outcome of the arbitration has significant implications for Tullow's operations in Ghana and the country's energy sector.
The award has sparked concerns over Tullow's future, with the company's financial struggles and debt weighing heavily on its operations. The Ghanaian government's careful approach to collecting the award reflects the importance of Tullow's role in the country's energy sector and the need to balance revenue collection with the company's capacity to operate and invest.
Key points
- Tullow's shares fell by 52% in London, leaving the company valued at approximately $200m.
- The award comprises a corporate income tax assessment of $196.5m and a 100% penalty of the same size.
- Ghana's external counsel, Foley Hoag LLP, worked with the Office of the Attorney-General and the GRA on the case.
