Tullow Agrees to Pay $400m Tax to Uganda

1445 Views Kampala, Uganda
A breakthrough has been reached in the standoff between the Government of Uganda and Tullow Oil. Reuters news agency reports today that Tullow has agreed to pay 400 million shillings in capital gain tax to government for the purchase of Heritage Oil's stake in the oil-rich Albertine valley. It quotes the State Minister for Energy Simon D'Ujanga, currently on a visit to India, who says the matter was comprehensively discussed and that Tullow will take on the tax burden. D'Ujanga says government will recognize Tullow's acquisition of the oil interests once payment is received. The tax dispute arose when Tullow bought Heritage Oil shares earlier this year. The company purchased the shares in the hopes of selling part of the interest to Total and China National Offshore Oil Company. It is expected that the new agreement will allow Tullow to renew an oil license in Uganda and to complete the sale. Bloomberg, a financial news service, reports that the international financial markets have reacted to the news with interest. Shares in Heritage Oil on the London Stock Exchange rose after the announcement.The shares climbed as high as six percent in an hour. Brian Glover, Tullow's country manager for Uganda, declined to comment when reached by phone. ###