Tullow Oil Plc is seeking arbitration over $387 million in back taxes it received from Ghana, part of the cash-strapped government’s review of past payments by some of the nation’s biggest companies of West Africa.
It has sought arbitration with the London International Chamber of Commerce over two notices it received from the Ghana Revenue Authority, Tullow said in a statement on Tuesday. The amount, plus penalties, violates the local unit’s rights under its oil agreements, according to the company.
“Tullow believes that resolution through international arbitration will bring certainty, which is in the best interests of all parties involved,” according to the statement. The estimates add to an earlier one for a $320 million remittance tax in 2021, for which the company is also seeking arbitration.
West Africa’s second-largest economy is in dire financial straits after losing access to international capital markets due to its rising debt and loan servicing costs. Ghana is restructuring most of its obligations amid a slump in its currency, the cedi, and is seeking a $3 billion loan from the International Monetary Fund.
The GRA has also issued back tax notices to Gold Fields Ltd., Kosmos Energy Ltd. and Africa’s largest wireless operator, MTN Group Ltd., which earlier this month said its bill for 8.2 billion cedis ($674 million) was withdrawn after talks with authorities . .
Tullow previously described the assessments as lacking merit, but did not disclose the amount. They cover a decade through 2020 and relate to the reversal of loan interest deductions and income received through a business interruption insurance policy, he said Tuesday. The company said it will continue talks with the government to try to resolve the disputes.
