Heritage tax dispute shifts to UK
TULLOW Oil's former partner in Uganda, Heritage Oil, has succeeded in shifting a dispute over tax from a court in Uganda to the UK.
An arbitration hearing between Heritage and the government in Kampala will now be held in London.
The arbitrators will be asked to rule on a complex disagreement between Tullow, Heritage and Uganda over payment of capital gains tax on the acquisition of Heritage's interests by Tullow. Tullow paid Heritage $1.45bn (€1bn) for the exploration licences.
"On balance, the news that Heritage has pressed to hold proceedings is positive in that it may finally provide some conclusion to the tax dispute," Goodbody Stockbrokers' analyst Gerry Hennigan said. "Whether the parties involved agree with any ruling, however, remains to be seen." Shares in Tullow closed 3.2pc to £11.09 in London yesterday.
A Ugandan tribunal could still take on the case if the Uganda government is not satisfied with the outcome of the London proceedings.
The Ugandan government has hired US-based law firm Curtis to defend it in the $404m tax dispute.