Tullow Oil has expressed disappointment after an International Chamber of Commerce (ICC) tribunal ruled that Ghana’s US$196.5 million corporate income tax assessment against the oil producer does not breach its petroleum agreements with the government.
Tullow Oil has reacted to a major development in its long-running tax dispute with Ghana, following an ICC tribunal ruling concerning a US$196.5 million corporate income tax assessment.
The assessment relates to proceeds Tullow received under its corporate Business Interruption Insurance Policy during the 2016–2019 financial years.
In a statement, Tullow said it was disappointed with the tribunal’s decision but indicated that it would engage further with the Government of Ghana before determining its next steps.
What the ICC tribunal ruled
The tribunal determined that the US$196.5 million tax assessment does not breach Tullow’s petroleum agreements with Ghana.
However, the ruling also addressed the penalties associated with the assessment. According to reports on the decision, the tribunal found that the 100% penalties imposed on Tullow fall outside the contractual protections contained in the company’s petroleum agreements.
The dispute dates back to December 2022, when Tullow Ghana received the corporate income tax assessment and payment demand from the Ghana Revenue Authority (GRA). Tullow subsequently referred the matter to ICC arbitration in February 2023, arguing that the assessment breached its rights under its petroleum agreements.
Tullow weighs its next move
Reacting to the ruling, Tullow said it would consider its options after further engagement with the Ghanaian government.
The company has maintained that it wants to resolve its outstanding tax disputes with Ghana on a mutually acceptable basis.
Tullow’s latest position comes against the backdrop of its wider Ghana operations, with the company continuing to invest in its Jubilee and TEN fields. In its latest half-year results, Tullow reported strong first-half production and said its Ghanaian portfolio continued to offer opportunities for further growth.
A significant tax dispute
The US$196.5 million case is one of two major tax disputes between Tullow and Ghanaian authorities. A separate assessment involving US$190.5 million relates to the disallowance of loan-interest deductions for the 2010–2020 financial years; that arbitration has been postponed to 2027.
For now, attention will turn to Tullow’s discussions with the Government of Ghana and what course of action the company ultimately chooses following the ICC ruling.
Tullow has made its position clear: it is disappointed with the decision, but the company is not yet signalling the end of the dispute, with further engagement with Ghana expected before its next move.
