Tullow Oil wins $320m tax arbitration against GRA
The ICC Tribunal determined that the Branch Profit Remittance Tax (BPRT) does not apply to Tullow Ghana's operations under its Petroleum Agreements for the Deepwater Tano and West Cape Three Points blocks, which encompass the prominent Jubilee and TEN oil fields located offshore Ghana.
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Tullow Oil PLC has won its $320m tax arbitration at the International Chamber of Commerce (ICC) against the Ghana Revenue Authority (GRA).
The ICC Tribunal determined that the Branch Profit Remittance Tax (BPRT) does not apply to Tullow Ghana's operations under its Petroleum Agreements for the Deepwater Tano and West Cape Three Points blocks, which encompass the prominent Jubilee and TEN oil fields located offshore Ghana.
This ruling nullifies a $320 million BPRT assessment previously imposed by the GRA and exempts Tullow Ghana from any future BPRT obligations related to these agreements. The outcome represents a key victory for the company, which has been engaged in broader tax negotiations with the Ghanaian government.
Rahul Dhir, CEO of Tullow Oil, in his welcoming comment published on Tullow's website, notes that
“We are delighted with the outcome and decision of the tribunal, which affirms our assessment and removes a material overhang from our business. We have continuously had confidence in the sanctity of our petroleum agreements and the dispute resolution process, which has now brought certainty to all parties. I look forward to constructive discussions with the Government of Ghana to resolve the remaining claims so that our collective focus remains on maximizing value from the Jubilee and TEN fields”.
The resolution of this tax dispute is a pivotal moment for Tullow Oil, enabling the company to concentrate on optimizing its operations in Ghana without the uncertainty of the contested tax. The decision could also influence ongoing discussions with the Ghanaian government regarding other unresolved tax matters.
Tullow Oil, listed on the London and Ghanaian stock exchanges (LSE: TLW), is an independent energy company committed to responsible oil and gas production in Africa.
The company has expressed its continuous engagement with the government of Ghana on two further disputes.
“Tullow continues to engage with the Government of Ghana on two further disputed tax claims, which were referred to the ICC in February 2023, with the aim of resolving these disputes on a mutually acceptable basis.”
