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Oil and gas company Tullow Oil has secured a favourable ruling from the International Chamber of Commerce (ICC) Tribunal, determining that the BPRT does not apply to operations including the Deepwater Tano and West Cape Three Points Petroleum Agreements offshore Ghana.
This decision relieves Tullow of the $320m (£256.34m) BPRT assessment issued by the Ghana Revenue Authority (GRA) and eliminates future BPRT liabilities under these agreements.
The Tribunal's award signifies that Tullow's operations, including the Jubilee and TEN fields offshore Ghana, are not encompassed by the BPRT tax regime outlined in the Petroleum Agreements.
Consequently, Tullow's obligation to pay the BPRT assessment has been nullified, providing financial relief and clarity of the company's tax position.
Tullow CEO Rahul Dhir said: “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 maximising value from the Jubilee and TEN fields.”
Tullow's engagement with the Government of Ghana continues as they aim to resolve two additional disputed tax claims. These disputes, referred to the ICC in February 2023, involve disagreements over loan interest deductions and Business Interruption Insurance (BII) policy proceeds totalling $387m plus penalties.
These assessments challenge the legitimacy of loan interest deductions from 2010 to 2020 and the handling of proceeds from Tullow's BII policy. The arbitration filings adhere to the dispute resolution process stipulated in the Petroleum Agreements governing Tullow's operations in Ghana.
Tullow maintains that the GRA's tax assessments infringe upon the company’s rights under its Petroleum Agreements.
The GRA has revised its corporate income tax assessment against Tullow, demanding $190.5m for disallowed loan interest deductions spanning a decade. This revised assessment supersedes all previous claims on the same issue. Additionally, Tullow has received a new tax assessment and demand notice for $196.5m related to BII proceeds covering fiscal years 2016–19.
"ICC Tribunal exempts Tullow Oil from $320m tax on Ghana operations" was originally created and published by Offshore Technology, a GlobalData owned brand.
