Tullow Oil (LON: TLW) is the best performing share in the FTSE Small Cap index today, following the announcement late on Thursday that there was a successful outcome to the Ghana tax arbitration. The share price recovered 12.3% to 24.55p.
The International Chamber of Commerce (ICC) tribunal related to the application of Branch Profit Remittance tax to the oil and gas company’s Deepwater Tano and West Cape Three Points petroleum agreements, offshore Ghana. The tribunal decided that the tax is not applicable to the Tullow Oil assets in Ghana.
This means that Tullow Ghana does not have to pay the $320m tax assessment and there will be no future exposure to the tax for the specific agreements.
Two further disputed tax claims were referred to the ICC two years ago. In the interim accounts, Tullow Oil said that it had more than $1bn of disputed tax claims in Ghana and other countries.
Before Christmas, Kosmos Energy, which also has interests in Ghana, decided against a bid for Tullow Oil. The share price is still more than one-third lower than one year ago.