Tullow Oil PLC on Tuesday said subsidiary Tullow Ghana Ltd has filed requests for arbitration with the International Chamber of Commerce in London in respect of two disputed tax assessments received from the Ghana Revenue Authority
The Africa and South America-focused oil and gas exploration company said the assessments relate to the disallowance of loan interest deductions for financial year 2010 to 2020 and proceeds received by Tullow under its business interruption insurance policy.
Tullow said it thinks the two disputed taw assessments, which total $387 million plus penalties, breach Tullow Ghana’s rights under its petroleum agreements.
Tullow explained that it has received a revised corporate income tax assessment for $190.5 million from the GRA relating to the disallowance of loan interest for the financial years 2010 to 2020. It has also received a new corporate income tax assessment and demand notice for $196.5 million from the GRA relating to proceeds received by Tullow during the financial years 2016 to 2019 under Tullow’s corporate business interruption insurance policy.
‘Tullow believes that resolution through international arbitration will bring certainty, which is in the best interest of all stakeholders. Notwithstanding this formal step, Tullow intends to continue to engage with the government of Ghana, including the GRA, with the aim of resolving these disputes on a mutually acceptable basis,’ the company said.
Tullow has previously filed a request for arbitration in respect of a separate assessment for branch profits remittance tax of $320 million in 2021. A hearing in respect of this dispute is scheduled for October 2023.
Shares in Tullow Oil were down 0.9% to 34.92 pence each in London on Tuesday morning. The company also is listed in Ghana.
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