Statement: Tullow Oil plc (‘Tullow’ or the ‘Group’) reports that it has settled its Capital Gains Tax (‘CGT’) debate with the Government of Uganda and the Uganda Revenue Authority (‘URA’) as to its farm downs to CNOOC and Total in 2012.
Taking after valuable discussions with the Government of Uganda and the URA, Tullow has consented to pay up all required funds and final settlement of its CGT liability.
This total amount comprises of $142 million that Tullow paid in 2012 and $108 million to be paid in three equal installments of $36 million.
The first of these was paid upon settlement and the rest of be paid in 2016 and 2017.
Tullow questioned the URA’s assessment of $473 million of CGT payable after the farm-downs and appealed against the evaluation before the Uganda Tax Appeals Tribunal (‘TAT’) and started an International Arbitration in September 2013.
In July 2014, the TAT rejected Tullow’s appeal and assessed Tullow’s CGT liability for the farm downs at $407 million less $142 million beforehand paid. In its 2014 records, Tullow recorded a contingent liability of $265 million in connection to the dispute.
Tullow hence claimed the TAT ruling to the Ugandan High Court and proceeded with its International Arbitration claim. Taking after this settlement, both these legal proceedings have been withdrawn.