Tullow Oil Plc has expressed disappointment with an International Chamber of Commerce (ICC) arbitral tribunal’s decision to uphold a $196.5 million corporate income tax assessment issued by Ghana in relation to insurance proceeds received by the company.
The tax assessment relates to proceeds Tullow received between 2016 and 2019 under its corporate Business Interruption insurance policy.
In its latest statement following the tribunal’s award, Tullow said the tribunal ruled that the tax assessment does not breach the company’s Petroleum Agreements with the Republic of Ghana.
The tribunal also ruled that the 100% penalties imposed in connection with the assessment fall outside the scope of the contractual protections contained in Tullow’s Petroleum Agreements.
Tullow said it was disappointed with the decision and would now consider its next steps following further engagement with the Government of Ghana.
“An update will be provided in due course,” the company said.
The dispute centred on whether Ghana’s taxation of the insurance proceeds was consistent with the contractual protections contained in Tullow’s Petroleum Agreements.
The ICC proceedings followed the tax assessment concerning business interruption insurance proceeds received by Tullow during the 2016–2019 financial years.
The tribunal’s award means the assessment itself was found not to be in breach of the contractual protections relied upon by Tullow. The separate finding on the 100% penalties means those penalties were determined to fall outside the scope of those contractual protections.
The development follows an earlier statement from the Government of Ghana announcing the tribunal’s ruling in its favour.
Tullow, which has significant interests in Ghana’s upstream petroleum sector, said it would engage further with the government before determining its next course of action.
The company has not indicated in its latest statement what specific steps it may pursue following the award.
