KAMPALA: A Ugandan tax appeals court on Wednesday ordered the Anglo-Irish firm Tullow Oil to pay a $407 million tax bill related to the sale of local assets in 2012.
Tullow Oil, which had already paid $142 million or 30 percent of the bill to appeal an earlier ruling, contested the decision and said it might seek international arbitration.
The ruling holds that the firm is fully liable to pay capital gains tax on the $2.9 billion sale of three of Tullow's exploration blocks in Uganda to France's Total and the China National Offshore Oil Corporation (CNOOC).
"Tullow is very concerned by this ruling which ignores a contractual term signed by a Government Minister in Uganda," company chief executive Aidan Heavey said in a statement.
"Tullow is Uganda's largest foreign investor and a major taxpayer. Over the last 10 years, Tullow has spent $2.8 billion in Uganda and discovered 1.7 billion barrels of oil.
This money was spent by Tullow on the understanding that our contracts with the Government, which contained important incentives to invest that were vital at a time when no oil had been discovered in Uganda, would be honoured," he added.
Heavey said the firm "will now carefully consider all our options to robustly challenge this ruling", and a company statement said: "Tullow considers, based on external legal advice, that the international arbitration tribunal will award in its favour."
Uganda discovered exploitable deposits of oil along its volatile western border with the Democratic Republic of Congo in 2006, and officials now estimate reserves at up to 3.5 billion barrels.
Comments
Comments are closed for this article.