Tullow Oil reports strong 2022 revenues, but faces $300m tax bill dispute
Tullow Oil is contesting a substantial £243m ($300m) tax bill in Ghana, home to the company’s flagship fields.
The fossil fuel producer is facing a higher than expected levy this year following new tax assessments from the country’s revenue authorities, and after fully utilising capital allowances by the end of Q1 2023.
In a statement to the London Stock Exchange, Tullow argued that the assessments were “without merit.” The company is currently engaged in talks with the government to resolve the dispute on a “mutually acceptable basis.”
Tullow revealed the tax bill in its latest trading update ahead of its 2022 full year results, set to be released in March.
In its performance review of 2022, Tullow reported revenues of £1.38bn ($1.7bn) at an average realised oil price post-hedging of $87 per barrel, and free cash flow of $469m.
This was ahead of guidance, driven by the increased equity interest in Ghana, and excluding the impact of the Norwegian arbitration payment.
The company reduced its year-end net debt to $1.9bn from $2.1bn the previous year, while capital and decommissioning expenditure were priced in at $354m and $72m respectively.
Looking ahead to this year, Tullow announced plans to invest $400m over 2023, including $300m on its flagship fields in Ghana and $90m in decommissioning projects. The company expects to produce between 58,000 and 64,000 bpd, broadly in line with last year.
