By: OrePulse

An international tribunal has dismissed all claims brought by Tullow Oil and upheld a $393.09 million tax assessment issued against the company by the Ghana Revenue Authority, Ghana's Finance Minister, Dr. Ato Forson, said in a statement on September 30.

According to the statement, the panel concluded that the assessment did not violate Ghana's petroleum agreements with Tullow, that the Ghana Revenue Authority properly applied the penalty, that the assessment was not time-barred, and that the authority's enforcement action was lawful.

"The Tribunal ruled in favour of Ghana. It dismissed all claims brought by Tullow and fully upheld the Ghana Revenue Authority's tax assessment of US$393,091,993.70. The Tribunal found that the assessment did not breach the Petroleum Agreements, the penalty was properly applied, the assessment was not time-barred, and the Ghana Revenue Authority's enforcement action was lawful," Forson said.

The minister credited the Office of the Attorney-General, the Ghana Revenue Authority and the country's external legal counsel, Foley Hoag LLP, with defending Ghana's position in the case, which centered on a disputed tax bill the authority had assessed against the oil company's operations in the country.

Officials said the decision backs up Ghana's long-held view that firms doing business in the country, whatever their size, must answer to Ghanaian law. "This outcome vindicates the position Ghana has maintained throughout: that every company operating in this country, regardless of its size, is subject to the laws of Ghana," Forson said.

The ruling arrived as Ghana and its partners work to maximize output and investment at the Jubilee and TEN fields, where Tullow is an operator alongside other partners.

The government said it had been in discussions with Tullow before the tribunal's ruling to reach an amicable resolution of outstanding tax matters, and said those discussions will continue. It said the talks cover both the matter decided by the tribunal and a separate, unresolved dispute over the disallowance of loan interest.

Despite the tax dispute, the government called Tullow an important player in Ghana's oil industry and said it remains the country's biggest petroleum producer overall. Officials said output from Jubilee and TEN feeds into the country's energy security, supplies gas used domestically, and supports jobs that thousands of Ghanaians rely on.

The government said it plans to carry out the tribunal's award under Ghanaian law, while weighing what is needed to keep the two fields running. It said Ghanaian law gives the Ghana Revenue Authority discretion over the schedule and method by which assessed tax bills get collected, and that this discretion would shape how the award is carried out.

The government said it aims to collect what is owed to the people of Ghana while allowing Tullow to keep operating and investing in the country as a going concern, a balance it said would guide how the tribunal's decision is implemented.