OIL EXPLORATION and production group Tullow is suing its former partner in the development of two of its Ugandan licences, Heritage Oil, to recover a $313 million (€220 million) tax outlay. Tullow last year bought Jersey-based Heritage out of its 50 per cent share of a licence in Uganda for $1.35 billion.
Heritage subsequently had a dispute with the Ugandan government over the tax liability on the proceeds of this deal. Last month, pending the outcome of that dispute, Tullow put $313 million in an escrow account in Kampala as part of an arrangement with the government that will allow it to develop the field with two new partners.
It confirmed yesterday it is suing Heritage to recover this money. A spokesman said Tullow “has a duty to its shareholders to seek reimbursement and shift liability back to Heritage”.
Heritage originally agreed to indemnify Tullow against any tax liabilities arising from the purchase of its interest in the Ugandan block. The terms require Heritage to reimburse Tullow in circumstances where taxes are charged to Tullow that relate to the acquisition of the blocks from Heritage. The case will be heard in London.
