Ghana has won its tax arbitration against international oil giant Tullow Ghana Limited, with the international tribunal upholding, in full, a US$393,091,993.70 assessment by the Ghana Revenue Authority (GRA).
The award, delivered on Tuesday by a tribunal constituted under the Rules of Arbitration of the International Chamber of Commerce, ends a dispute over how business interruption insurance proceeds should be taxed.
According to a statement from the Ministry of Finance, the tribunal dismissed all of Tullow’s claims.
What the Tribunal Found
The Finance Ministry says the tribunal ruled that the tax assessment did not breach the Petroleum Agreements and the penalty was properly applied.
The tribunal further found that the assessment was not time-barred and the GRA’s enforcement action was lawful.
Finance Minister Dr. Cassiel Ato Forson, who signed the statement, said the outcome vindicates Ghana’s long-held position that every company operating in the country, regardless of size, is subject to its laws.
He acknowledged the Office of the Attorney-General, the GRA and Ghana’s external counsel, Foley Hoag LLP, for defending the Republic’s interests.
The Timing
The ruling lands at a sensitive moment. Government says it is working with Tullow and the Jubilee partners to maximize the prospects of the Jubilee and TEN fields.
Before the award, the two sides were already in talks to settle outstanding tax matters amicably. Those discussions cover both the matter the tribunal has just decided and separate proceedings over the disallowance of loan interest.
The Ministry says the talks are ongoing and will be resolved “in the mutual interest of both parties.” It noted that the company is Ghana’s largest petroleum producer, and that its Jubilee and TEN fields support the country’s energy security, domestic gas supply and the livelihoods of thousands of Ghanaians. Government said it is in the national interest that the relationship endures.
What Happens Next
Government says it will work with Tullow to give effect to the award in line with Ghanaian law, with due regard for the continuity of operations in the two fields and Tullow’s capacity to sustain investment in them.
The GRA has the means to determine the time and manner in which the assessed liabilities are met. The Ministry says it intends to implement the award in a way that secures the revenues due to Ghanaians while preserving Tullow’s ability to keep operating and investing in Ghana “as a going concern.”
The statement does not say when payment is expected or how the sum will be settled. Those details, along with the outcome of the loan interest proceedings, are likely to shape how this dispute is remembered.
