Tullow Oil plc has expressed disappointment after an International Chamber of Commerce (ICC) tribunal upheld Ghana's $196.5 million corporate income tax assessment. The assessment relates to insurance proceeds received by the oil producer between 2016 and 2019. The tribunal ruled that the tax assessment is not in breach of Tullow's Petroleum Agreements with Ghana. The company will consider its next steps after further engagement with the Government of Ghana.
The tax assessment relates to proceeds Tullow received under its corporate Business Interruption insurance policy during the 2016-2019 financial years. The tribunal also ruled that the assessment of penalties of 100% fall outside the scope of the contractual protections in Tullow's Petroleum Agreements with Ghana. Tullow said it will provide an update on the matter in due course. The company is a key partner in Ghana's petroleum sector and the country's largest petroleum producer.
Ghana has welcomed the ICC Tribunal ruling, noting that it comes as the country and its Jubilee partners work to maximize the prospects of the Jubilee and Ten Fields. The government had been engaged in discussions with Tullow to resolve amicably the outstanding tax matters between both parties. Those discussions will continue to cover both the matter determined by the Tribunal and the separate proceedings concerning the disallowance of loan interest.
The government stressed that Tullow remains a key partner in Ghana's petroleum sector, supporting 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. The Finance Minister noted that Ghana's laws give the GRA authority to determine the time and manner in which assessed tax liabilities are paid.
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. The GRA will work with Tullow to ensure a smooth implementation of the tribunal's award. The country's energy sector relies heavily on Tullow's operations in the Jubilee and TEN fields.
Tullow's operations in Ghana have been significant, with the company producing oil and gas in the Jubilee and TEN fields. The government values Tullow's contributions to the country's economy and energy sector. The ICC tribunal's ruling brings clarity to the tax dispute between Tullow and Ghana.
The government and Tullow will continue to engage on the matter, with the company considering its next steps. The implementation of the tribunal's award will be done in a manner that ensures continuity of operations in the Jubilee and TEN fields. Key aspects of the ruling will be taken into account to ensure a mutually beneficial outcome for both parties.
Key points
- The ICC tribunal upheld Ghana's $196.5 million corporate income tax assessment against Tullow Oil.
- Tullow Oil expressed disappointment with the tribunal's decision and will consider its next steps.
- The Ghanaian government welcomed the ruling and will work with Tullow to implement the tribunal's award in accordance with Ghanaian law.
