Inveting.com -- Shares of Tullow Oil (LON:TLW) jumped over 10% on Friday following a favorable outcome in a crucial arbitration case, providing the company with a financial and strategic advantage.
In a stock exchange filing, Tullow disclosed the favorable decision from the International Chamber of Commerce regarding a long-running tax dispute with the Ghana Revenue Authority.
The case focused on the applicability of the Branch Profit Remittance Tax to Tullow's operations under the Deepwater Tano and West Cape Three Points Petroleum Agreements, which include the Jubilee and TEN fields off the coast of Ghana.
The ICC tribunal ruled that Tullow Ghana, a subsidiary of Tullow Oil, is not liable for the $320 million BPRT assessment that had been issued by the GRA.
The tribunal determined that BPRT does not apply to Tullow’s operations in Ghana, as it falls outside the tax framework stipulated in the Petroleum Agreements between Tullow and the government.
This ruling effectively eliminates any financial obligation tied to the disputed tax, securing Tullow Ghana from future BPRT claims related to its operations in the region.
“Tullow continues to engage with the Government of Ghana on two further disputed tax claims, which were referred to the ICC in February 2023, with the aim of resolving these disputes on a mutually acceptable basis,” the company said in a statement.
The company's chief executive, Rahul Dhir, expressed hope for productive talks with the government of Ghana to settle the remaining claims, emphasizing the importance of optimizing value from the Jubilee and TEN fields.