Tul­low agrees to US$250 mil­lion tax bill in Uganda

The China Post - - BUSINESS INDEX & -

An­glo- Ir­ish com­pany Tul­low Oil said Mon­day it had set­tled a long- run­ning tax dis­pute in Uganda by agree­ing to the pay­ment of a US$ 250 mil­lion bill.

In July 2014, a Ugan­dan court or­dered Tul­low to pay US$ 407 mil­lion in taxes re­lated to the sale of lo­cal as­sets two years ear­lier, but the com­pany then sought ar­bi­tra­tion to re­duce the cost.

“Tul­low has agreed to pay US$ 250 mil­lion in full and fi­nal set­tle­ment of its CGT ( Cap­i­tal Gains Tax) li­a­bil­ity,” a com­pany state­ment read.

“This sum com­prises US$ 142 mil­lion that Tul­low paid in 2012, and US$ 108 mil­lion to be paid in three equal in­stall­ments of US$ 36 mil­lion. The first of these was paid upon set­tle­ment and the re­main­der will be paid in 2016 and 2017.”

Uganda dis­cov­ered ex­ploitable de­posits of oil along its volatile western bor­der with Demo­cratic Re­pub­lic of the Congo in 2006, and of­fi­cials now es­ti­mate re­serves at up to 3.5 bil­lion bar­rels.

“The set­tle­ment of this long- run­ning dis­pute is good news for Tul­low and Uganda,” com­pany chief ex­ec­u­tive Ai­dan Heavey said in a state­ment.

“In re­cent months, the Gov­ern­ment of Uganda has pro­posed welcome and nec­es­sary changes to its tax regime for oil and gas in­vest­ments, which it is hoped will en­able sub­stan­tive progress to be made to­wards the sanc­tion of the Lake Al­bert oil de­vel­op­ment.”

The pay­ments are re­lated to a cap­i­tal gains tax on the US$ 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).

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