Tullow Oil has provided an update in its Trading Report released on November 29, 2024, revealing that the International Arbitration Court in London is preparing to deliver its decision on the tax dispute with the Ghana Revenue Authority (GRA).

The case centres around a $400 million tax assessment, and a verdict is expected by the close of the year after both parties presented their arguments.

In the report, Tullow Oil confirmed that a hearing took place in October 2023, with the court's decision anticipated before the year's end.

Tullow’s CEO, Rahul Dhir, discussed the potential consequences of the court's ruling earlier this year during a presentation to investors in London.

He emphasised that the outcome could have significant implications for the company’s operations and financial health.

"Management has thoroughly assessed the potential results based on legal counsel, tax advice, and prior experience with similar cases," Dhir said.

Background to the dispute

The legal conflict dates back to October 2021 when Tullow Ghana Limited (TGL) disputed a $320.3 million Branch Profits Remittance Tax (BPRT) levied after a tax audit covering the 2014 to 2016 fiscal years.

In response, TGL submitted further arbitration claims to the International Chamber of Commerce in London in February 2023, challenging two additional tax assessments from the GRA.

These assessments involve the disallowance of interest deductions on loans for the years 2010 to 2020 and funds received under Tullow’s corporate Business Interruption Insurance policy for the period 2016 to 2019.

Tullow maintains that the GRA’s application of BPRT is based on laws incompatible with the company’s petroleum agreements and the relevant double tax treaties.

The company argues that the tax assessments do not conform to the legal framework governing its operations in Ghana. 

As the case remains unresolved, Tullow is not required to make payments on the disputed tax charges.