Shifting the goal post, recalibrating the metre? An analysis of Tullow’s tax dispute with Ghana Revenue Authority

In 2024, Tullow Oil Ghana instituted an action against the Republic of Ghana before the International Chamber of Commerce (ICC), challenging the imposition by the Ghana Revenue Authority (GRA) of a US$320 million Branch Profit Remittance Tax (BPRT) assessment, contending that it was in breach of the tax-stability provisions of the petroleum agreements entered into, that is, the 2004 West Cape Three Points and the 2006 Deepwater Tano Agreements. The dispute centred on whether Tullow was required to pay tax on profits the company transferred to its parent company outside the jurisdiction. The Tribunal ruled that the BPRT did not apply to Tullow’s operations under its petroleum agreements and thus that Tullow was not liable to pay the US$320 million BPRT assessment and would not be liable to any such future assessments in respect of its operations under the petroleum agreements. This case offers valuable insights into the approach adopted by arbitral tribunals to the interpretation of petroleum agreements, that is, deeming them to be sacrosanct and placing a premium on the sanctity of contracts and, in the case of freezing stabilization clauses, applying a strict and literal interpretation coupled with a voracious proclivity for the enforcement of the same to the letter.