Tullow Oil plc (Tullow) announces that Tullow Ghana Limited (TGL) 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 (GRA).
The assessments relate to the disallowance of loan interest deductions for the fiscal years 2010 – 2020 and proceeds received by Tullow Oil plc under Tullow’s 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 TGL’s 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 $387 million plus penalties, breach TGL’s rights under its Petroleum Agreements. Tullow’s decision to file for arbitration on these matters does not result in any change to the overall exposure previously disclosed.
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.
Background to the assessments
TGL has received a revised corporate income tax assessment for $190.5 million from the GRA relating to the disallowance of loan interest for the fiscal years 2010 – 2020. Tullow has previously disclosed assessments by the GRA relating to the same issue; the revised assessment received in December 2022 supersedes all previous claims.
TGL 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 fiscal years 2016 – 2019 under Tullow’s corporate Business Interruption Insurance policy, previously referred to in Tullow’s Trading Update on 25 January 2023.
Branch Profits Remittance Tax arbitration
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.
