By Faustina Dagadu
Tullow Oil has expressed disappointment with an International Chamber of Commerce (ICC) tribunal ruling upholding a corporate income tax assessment linked to its operations in Ghana.
The oil producer said it was reviewing the decision and would engage further with the Government of Ghana before determining its next steps.
In a notice to investors and shareholders, Tullow said: “Tullow is disappointed that the Tribunal has come to this decision and will now consider next steps after further engagement with the Government of Ghana.”
The company said it would update the market on its next course of action in due course.
The dispute relates to a US$196.5 million corporate income tax assessment concerning proceeds received by Tullow under its corporate Business Interruption Insurance Policy for the 2016–2019 period.
Tullow confirmed that it was aware of the ICC tribunal's decision and acknowledged the finding that the Ghana Revenue Authority's (GRA) tax assessment did not breach the company's Petroleum Agreements with Ghana.
The tribunal also addressed the penalties imposed in connection with the assessment.
According to Tullow, the tribunal found that the 100% penalties imposed fell outside the scope of the contractual protections contained in its Petroleum Agreements.
The company had referred the matter to international arbitration in London after disputing the GRA's assessment.
Tullow had argued that the tax assessment was inconsistent with the protections contained in its Petroleum Agreements governing its operations in Ghana.
The latest decision means the tribunal has rejected Tullow's challenge to the underlying tax assessment, while the company considers its options and continues discussions with the Ghanaian government.
The dispute is part of a wider series of tax matters between Tullow and the GRA involving the interpretation and application of Ghana's tax laws and the protections contained in the company's Petroleum Agreements.
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