In its tax dispute with the Ghana Revenue Authority (GRA), Tullow Oil PLC has declared a major court win.
Tullow Ghana’s operations under the Deepwater Tano and West Cape Three Points Petroleum Agreements, which cover the Jubilee and TEN offshore oil fields, are exempt from the Branch Profit Remittance Tax (BPRT), according to a ruling by the International Chamber of Commerce (ICC) Tribunal.
The Tribunal’s ruling guarantees that Tullow Ghana won’t be held accountable for any future BPRT liabilities resulting from its operations under these agreements and exempts the business from the $320 million BPRT assessment that the GRA imposed.
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This decision upholds the tax structure specified in the Petroleum Agreements, which Tullow said served as the operational framework.
“As a result of the Tribunal’s award, Tullow Ghana is not liable to pay the $320 million BPRT assessment issued by the Ghana Revenue Authority and will have no future exposure to BPRT in respect of its operations under the Petroleum Agreements. 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”, the company said in a press release.
Tullow CEO Rahul Dhir expressed satisfaction with the decision, stating, “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.”
Two further tax disputes that were referred to the ICC in early 2023 are still being discussed between Tullow and the Ghanaian government in spite of this resolution.
The business has stated its intention to settle these disputes amicably and turn its attention to optimizing the value of the Jubilee and TEN fields, which are vital resources in Ghana’s oil and gas industry.
