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06/09/2014 16:44

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RNS Number : 5294M
Tullow Oil PLC
16 July 2014 
 
News Release 
 
Ugandan Tax Appeals Tribunal delivers ruling 
 
16 July 2014 - Tullow Oil plc announces today that its subsidiaries operating
in Uganda have received a ruling from the Tax Appeals Tribunal (TAT) in Uganda
relating to Capital Gains Tax (CGT). 
 
Following the completion of the farm-down of 66% of its assets in Uganda to
CNOOC and Total in 2012, Tullow was issued with a CGT assessment by the Uganda
Revenue Authority (URA) of approximately $472m. Tullow paid 30% of the
assessment (approximately $142m) as legally required to launch an appeal. 
 
The ruling from the TAT is lengthy and deals with a number of different issues
and will therefore require significant further legal evaluation. However,
Tullow can confirm that the TAT has ruled against Tullow on the key issue of
the express tax exemption contained in the Production Sharing Agreement for
Exploration Area 2 (EA2 PSA). 
 
The TAT has calculated Tullow's CGT liability for the farm-downs, including
certain reliefs, to be $407m, of which $142m has already been paid by Tullow.
Tullow believes that the amount already paid exceeds its liabilities in
relation to CGT on EA1 and EA3A. However, there are specific points in the
ruling that Tullow may wish to challenge relating to these two Areas. 
 
A specific CGT exemption was included in the EA2 PSA. Tullow is extremely
disappointed that the TAT ruled that the then Minister of Energy did not have
the legal authority to grant such an exemption. Tullow believes that the TAT
has erred in law and Tullow will challenge the EA2 assessment through the
Ugandan courts and international arbitration but hopes that further direct
negotiation with the Government can resolve this matter. Tullow considers,
based on external legal advice, that the international arbitration tribunal
will award in its favour. 
 
COMMENTING TODAY, AIDAN HEAVEY, CHIEF EXECUTIVE SAID: 
 
"Tullow is very concerned by this ruling which ignores a contractual term
signed by a Government Minister in Uganda. Tullow is Uganda's largest foreign
investor and a major taxpayer. Over the last 10 years, Tullow has spent $2.8
billion in Uganda and discovered 1.7 billion barrels of oil. This money was
spent by Tullow on the understanding that our contracts with the Government,
which contained important incentives to invest that were vital at a time when
no oil had been discovered in Uganda, would be honoured. We will now carefully
consider all our options to robustly challenge this ruling." 
 
FOR FURTHER INFORMATION CONTACT: 
 
 Tullow Oil plc (London)(+44 20 3249 9000)Chris Perry (Investor Relations)James Arnold (Investor Relations)George Cazenove (Media Relations)  Citigate Dewe Rogerson(London) (+44 207 638 9571) Martin JacksonShabnam Bashir  Murray Consultants (Dublin)(+353 1 498 0300) Pat WalshJoe Heron  
 
 
Notes to Editors 
 
Tullow Oil plc 
 
Tullow is a leading independent oil & gas, exploration and production group,
quoted on the London, Irish and Ghanaian stock exchanges (symbol: TLW) and is
a constituent of the FTSE 100 Index. The Group has interests in over 140
exploration and production licences across 23 countries which are managed as
three regional business units: West & North Africa, South & East Africa and
Europe, South America and Asia. 
 
Follow Tullow on: 
 
Twitter: www.twitter.com/TullowOilplc                                        
You Tube: www.youtube.com/TullowOilplc 
 
Facebook: www.facebook.com/TullowOilplc                                
LinkedIn: www.linkedin.com/company/Tullow-Oil 
 
IR App: bit.ly/TullowApp                                                      
             Website: www.tullowoil.com 
 
This information is provided by RNS
The company news service from the London Stock Exchange