Tullow Oil (LSE:TLW) has received a ruling from an International Chamber of Commerce arbitration tribunal concerning a $196.5 million corporate income tax assessment in Ghana relating to business interruption insurance proceeds.
The assessment concerns insurance proceeds received by Tullow between 2016 and 2019 and associated penalties imposed by the Ghanaian authorities.
The tribunal determined that the corporate income tax assessment does not breach Tullow’s Petroleum Agreements in Ghana.
Tribunal Rules on Tax Assessment and Penalties
Tullow had challenged the tax treatment of the business interruption insurance proceeds and the related penalties through arbitration.
According to the ruling, the $196.5 million corporate income tax assessment is not inconsistent with the contractual protections contained in Tullow’s Petroleum Agreements.
The tribunal also determined that the 100% penalties assessed in connection with the tax matter fall outside the scope of the contractual protections provided by those agreements.
Tullow to Engage With Ghanaian Government
Tullow said it was disappointed with the outcome of the arbitration.
The company plans to engage further with the Government of Ghana before determining its next steps following the tribunal’s decision.
No further course of action was specified in the supplied update.
Ghana Remains Core Market for Tullow
Tullow Oil is an independent energy company focused on oil and gas production, with Ghana representing its principal operating market.
The company holds interests in producing assets in Ghana and is listed on both the London and Ghanaian stock exchanges under the symbol TLW.
Its operations are primarily focused on West African hydrocarbons, with its Ghanaian producing fields contributing to the group’s operations and revenue.
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