Tullow Oil to pay $250 million to settle Uganda disputeStaff writer ▼ | June 22, 2015
Tullow Oil has agreed to pay $250 million to settle a capital gains tax dispute with the government of Uganda over the 2012 sale of a 67% stake in the oil explorer's Ugandan licenses to Cnooc and Total.
Settlement The 2012 sale of a 67% stake
"The settlement of this long-running dispute is good news for Tullow and Uganda," said Chief Executive Aidan Heavey.
"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," he said.
Tullow disputed Uganda's original assessment of $473 million of capital gains tax following the completion of the $2.9 billion farm-down deal with Total and Cnooc. It submitted an appeal to the Uganda Tax Appeals Tribunal and launched an international arbitration.
In its 2014 accounts, Tullow recorded a contingent liability of $265 million in relation to the dispute. ■