Tullow Oil announced that it has filed requests for arbitration with the International Chamber of Commerce in London to settle disputed tax assessments for the fiscal years 2010-2020 with the Ghana Revenue Authority (GRA).
The assessments relate to the disallowance of loan interest deductions proceeds received by Tullow Oil under its corporate Business Interruption Insurance policy. The requests for arbitration have been filed in accordance with the dispute resolution process set out in the Petroleum Agreements which govern Tullow Ghana Ltd’s (TGL) activities in Ghana.
A copy of the Petroleum Agreements can be viewed on the website of the Ghana Petroleum Register.
Tullow considers that the two disputed tax assessments, which total US$387 million plus penalties, breach TGL’s rights under its Petroleum Agreements. The company had received a revised corporate income tax assessment for US$190.5 million from the GRA relating to the disallowance of loan interest for the fiscal years 2010-2020. It said it previously disclosed assessments by the GRA relating to the same issue; and that the revised assessment supersedes its previous claims.
Tullow said it has also received a new corporate income tax assessment and demand notice for US$196.5 million from the GRA relating to proceeds it received during the fiscal years 2016–2019 under its 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.
The company also previously filed a request for arbitration in respect of a separate assessment for Branch Profits Remittance Tax of US$320 million in 2021. A hearing in respect of this dispute is scheduled for October 2023.
Tullow Oil is an independent oil and gas exploration and production company focused on Africa and South America. Offshore Guyana, it has a 60% operated interest in the Orinduik Block and a 37.5% non-operated interest in the Kanuku Block. Tullow is expected to drill one exploration well offshore Guyana in 2023.
