Tullow oil, the West Africa-focused energy giant, has scored a significant legal victory in its ongoing tax disputes with Ghana. The International Chamber of Commerce (ICC) ruled that the contentious Branch Profit Remittance Tax (BPRT) does not apply to Tullow’s operations in the Deepwater Tano and West Cape Three Points oil fields.
The ruling means Tullow avoids paying the hefty $320 million tax assessment initially imposed and sidesteps future liabilities under the BPRT framework. This tax typically applies to profits generated by foreign companies in a country that are later transferred back to their parent entities overseas.
A company statement confirmed the development, noting, ‘The ICC ruling has provided clarity on the matter, ensuring that the BPRT does not pertain to our activities in these key offshore fields.’
The win, however, does not mark the end of Tullow’s tax challenges in Ghana. The company remains in discussions with the government to resolve two other unresolved claims, which could carry substantial financial implications.
Tullow’s operations in Ghana are critical to its portfolio, producing a significant portion of its oil output. This ruling reduces financial uncertainty and bolsters its ability to focus on expanding operations in the region.
While the ICC’s decision is a positive development for Tullow, the unresolved disputes underline the complexities of navigating tax regulations in resource-rich markets. Ghana, like many nations, is keen to maximise revenue from its natural resources, often leading to clashes with foreign operators over fiscal terms.
For Tullow, this decision is a step forward in its broader effort to stabilise its financial and operational outlook in one of Africa’s most lucrative oil markets. However, all eyes remain on the outcome of its ongoing negotiations with the Ghanaian government.
Credit: Africabriefing
