Ghana Loses $320 Million in Tax Dispute as ICC Rules in Favour of Tullow Oil

In a blow to the Ghanaian government, the International Chamber of Commerce (ICC) has ruled in favour of Tullow Oil in a $320 million tax dispute with the Ghana Revenue Authority (GRA).

The arbitration decision, which concerns the Branch Profit Remittance Tax (BPRT), means that Ghana will not receive the anticipated $320 million in tax revenue from the company, raising concerns about the country’s fiscal framework and its ability to attract future investments in the oil and gas sector.

The ICC’s ruling determined that the BPRT does not apply to Tullow’s operations in Ghana’s Deepwater Tano and West Cape Three Points fields.

As a result, Tullow is exempt from the $320 million assessment and will not be liable for future BPRT payments related to its operations in these key oil fields.

The ruling comes as a significant setback for Ghana, which had hoped to collect the disputed amount from the company.

The decision effectively denies the country an important source of revenue, raising wider questions about the sustainability and fairness of the country’s oil taxation system.

As Ghana continues its efforts to attract foreign investment, the ruling underscores the need for clarity and consistency in tax policies to avoid similar disputes in the future.

In a press statement, Tullow Oil expressed relief and satisfaction with the ICC’s decision, which it believes affirms its position on the tax assessment.

“Tullow is pleased that the ICC tribunal 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.”

Tullow also reiterated its commitment to working with the government of Ghana to resolve any remaining disputes in a constructive manner.

Despite this legal victory, the company is still engaged in arbitration over two additional tax disputes with the GRA, involving a combined disputed amount of over $387 million, excluding penalties.