Adnan Adams Mohammed
Tullow Oil, a key player in Ghana’s oil and gas sector, has won in a $320 million tax dispute case brought forward by Ghana Revenue Authority (GRA) at the International Chamber of Commerce (ICC).
A statement released by the company last week indicated that, the ICC determined that the Branch Profit Remittance Tax (BPRT) does not apply to Tullow’s operations in Ghana’s Deepwater Tano and West Cape Three Points fields.
Consequently, Tullow is exempt from the US$320 million BPRT assessment and will not face future BPRT liabilities related to these operations.
“Tullow is pleased that the has confirmed our position that the $320 million BPRT assessment issued by the GRA in Ghana was not applicable to our operations,” the company stated. “This ruling brings clarity on the applicability of BPRT to our operations under the relevant Petroleum Agreements and double tax treaties.”
However, the company emphasized its continued commitment to working with the Government of Ghana to resolve outstanding disputes amicably.
The arbitration ruling on the BPRT is a setback for Ghana and the GRA, as the decision effectively denies the country $320 million in expected revenue.
This raises broader questions about the fiscal frameworks governing Ghana’s oil and gas sector, particularly as the government seeks to attract investment while ensuring fair tax compliance.
Meanwhile, Tullow which has significant investments in the Jubilee and TEN fields expressed relief at the outcome, which it believes upholds its position on the tax assessments.
The BPRT is a tax on profits that foreign businesses earn within a country and transfer to their parent companies abroad.
Tullow contested the GRA’s application of this tax, arguing it was inconsistent with the terms of their Petroleum Agreements and existing tax treaties.
While the ICC ruling is a victory for Tullow, the company is still engaged in arbitration over two additional tax disputes with the GRA. These include the disallowance of loan interest deductions for the fiscal years 2010–2020 and proceeds received under Tullow’s Business Interruption Insurance policy for 2016–2019. The combined disputed amount exceeds $387 million, plus penalties.
Tullow has stated its intention to resolve these matters through constructive dialogue, with arbitration proceedings ongoing.
The ICC is the world’s largest business organisation, representing 45 million companies.
