Friday 26 December 2014

Decision due today on Tullow Oil's $313m court award

Published 23/07/2014 | 02:30

Tullow Oil
Tullow Oil
Tullow Oil chief Aidan Heavey

Tullow Oil will find out this morning if it has been successful in holding on to a $313m (€232m) court award it secured from Heritage Oil last year following a deal in Uganda.

The ruling will come just days after Tullow said it would challenge a $407m (€302m) tax bill that has been slapped on the company by the Ugandan Revenue Authority.

The ruling due today in London relates to a deal that was struck in 2010 which saw Tullow, whose chief executive is Aidan Heavey, agree to pay £1.45bn (€1.83bn) to buy Heritage's assets at the Lake Albert basin in Uganda.

The basin is estimated to hold about one billion barrels of oil.

But Heritage claimed that it wasn't liable for a $434m (€322m) capital gains tax bill that was due as a result of the sale, and handed over just $121.5m to the Ugandan government.

The government then prevented Tullow from working on the Lake Albert basin and from progressing deals to sell stakes in the field to China's CNOOC and France's Total, until it 
advanced the remaining $313m as "security" on behalf of Heritage.

That money was paid by Tullow, CNOOC and Total.

Tullow then sued Heritage in London, having sought an indemnity from Heritage under the sale agreement in respect of the $313m payment it handed over to Ugandan authorities.

Last year, a judge ruled in favour of Tullow and dismissed a counterclaim by Heritage.

Last week, Tullow said it would challenge a $407m tax bill it has now been hit with relating to the 2011 sale of a combined 66pc stake in the Lake Albert basin to CNOOC and Total.

Tullow sold that stake for $2.9bn (€2.1bn).

Last week, Tullow insisted it is only liable to pay $143m in tax related to the deal and 
said it will challenge the 
decision.

Irish Independent

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