Tullow Oil Disputes $387m in Ghana tax assessments

Tullow Oil is seeking arbitration over $387 million (€361 million) in tax assessments it received from Ghana, part of the cash-strapped government’s review of past payments by some of the west African nation’s largest companies.

Arbitration has been requested with the International Chamber of Commerce in London over two notices it received from the Ghana Revenue Authority, Tullow said on Tuesday in a statement.

The amount, plus penalties, breach the local unit’s rights under its petroleum agreements, according to the company.

“Tullow believes that resolution through international arbitration will bring certainty, which is in the best interest of all stakeholders,” according to the statement. The assessments add to an earlier one for a remittance tax of $320 million in 2021, for which the company also seeks arbitration.

West Africa’s second-largest economy is in a dire financial state after losing access to international capital markets because of its ballooning debt and loan-service costs.

Ghana is restructuring most of its obligations amid a slump in its currency, the cedi, and is seeking a $3 billion loan from the International Monetary Fund.

The GRA has also issued back-tax notices to Gold Fields, Kosmos Energy, and Africa’s largest wireless carrier MTN Group, which earlier this month said its bill for 8.2 billion cedi (€629 million) was dropped after discussions with authorities.

Tullow earlier described the assessments as lacking merit, but didn’t disclose the amount.

They span a decade through 2020 and relate to the disallowance of loan-interest deductions and proceeds received through a business-interruption insurance policy, it said on Tuesday.

The company said it will continue talks with the government to try and resolve the disputes. – Bloomberg