Ghana has emerged victorious in a major tax dispute against oil producer Tullow Oil. An international tribunal has dismissed all claims brought by the company and upheld a $393.09 million tax assessment issued by the Ghana Revenue Authority (GRA). This development was announced by Finance Minister, Dr. Ato Forson, on September 30. The tribunal's ruling found that the tax assessment did not breach Ghana's Petroleum Agreements with Tullow.
The tribunal's decision was comprehensive, ruling that the penalty imposed by the GRA was properly applied and that the assessment was not time-barred. Furthermore, the tribunal found that the GRA's enforcement action was lawful. According to Dr. Ato Forson, the tribunal's ruling dismissed all claims brought by Tullow and upheld the GRA's tax assessment of $393,091,993.70 in full.
The Finance Minister acknowledged the work of the Office of the Attorney-General, the GRA, and Ghana's external legal counsel, Foley Hoag LLP, in defending Ghana's interests in the case. The government's statement emphasized that the ruling reinforces its position that companies operating in Ghana, regardless of their size, are subject to the country's laws.
The government noted that the ruling comes as Ghana and its Jubilee partners are working to maximize the prospects of the Jubilee and Ten Fields. Prior to the ruling, the government had been engaged in discussions with Tullow to resolve amicably the outstanding tax matters between both parties. These discussions will continue to cover both the matter determined by the Tribunal and the separate proceedings concerning the disallowance of loan interest.
Despite the tax dispute, the government stressed that Tullow remains a key partner in Ghana's petroleum sector and the country's largest petroleum producer. Tullow's operations in the Jubilee and TEN fields support Ghana's energy security, domestic gas supply, and thousands of Ghanaian livelihoods.
The government intends to work with Tullow to implement the tribunal's award in accordance with Ghanaian law, while taking into account the need to maintain operations in the two fields. The government will have due regard to the continuity of operations in the Jubilee and TEN fields and Tullow's capacity to sustain the investments required in those fields.
The government's objective is to secure the revenues due to the Ghanaian people while preserving Tullow's capacity to continue operating and investing in Ghana as a going concern. Ghana's laws give the GRA authority to determine the time and manner in which assessed tax liabilities are paid. The government is committed to working with Tullow to ensure a mutually beneficial outcome.
Key points
- The international tribunal upheld a $393.09 million tax assessment issued by the Ghana Revenue Authority (GRA) against Tullow Oil.
- The tribunal's ruling dismissed all claims brought by Tullow and found that the GRA's enforcement action was lawful.
- The government will work with Tullow to implement the tribunal's award while ensuring continuity of operations in the Jubilee and TEN fields.
