Tullow Oil Shares Halve After Losing Ghana Tax Dispute

Shares of Tullow Oil Plc plummeted by 50% following a major defeat in an arbitration dispute over tax assessments in Ghana, where the company’s primary producing fields are located.

The ruling by the International Chamber of Commerce represents a significant setback for the UK-based firm, which has been utilizing revenues from its key Ghanaian operations to service its substantial debt. Following the announcement, the stock plunged by as much as 52% in London trading, marking its steepest decline since 2020 and erasing a year-to-date gain of over 300% achieved earlier in the month.

The tribunal determined that a $196.5 million corporate income tax assessment, which concerns revenues generated between 2016 and 2019, does not violate Tullow’s petroleum agreements. Additionally, the panel ruled that contractual protections do not cover the associated penalties.

In a statement on social media, Ghana’s Finance Minister, Cassiel Ato Forson, indicated that the government plans to enforce the ruling to secure state revenues while maintaining a cooperative environment that allows Tullow to continue its local operations and investments.

Tullow expressed disappointment with the tribunal’s decision and stated it is evaluating its options in consultation with the Ghanaian government. The company is currently engaged in another unresolved arbitration case in Ghana, as well as an active tax dispute in Kenya.