Tullow Oil, the Irish-listed oil explorer company, have reached an agreement with the Ugandan government and the Ugandan Revenue Authority to settle a capital gains dispute.
The company have agreed to pay out $250 million which works out to be in the region of €220 million. The Ugandan Revenue Authority had originally claimed that an amount of $473 million was payable after farm-downs to France's Total and China's National Offshore Oil Corporation (CNOOC).
Tullow Oil had paid 30pc of the assessment,which amounted to around $142 million as required by law. However they then launched an appeal to the Ugandan Tax Appeals Tribunal (TAT) against the ruling made by the Ugandan Revenue Authority.
The new settlement amount it now made up of the original $142 million already paid out and another sum of $108 million to be paid in three equal instalments of $36 million.
Chief Executive of Tullow Oil, Aidan Heavey, said that the deal was good news for all involved parties.
"The settlement of this long-running dispute is good news for Tullow and Uganda. In recent months, the Government of Uganda has proposed welcome and necessary changes to its tax regime for oil and gas investments which it is hoped will enable substantive progress to be made towards the sanction of the Lake Albert oil development," Mr. Heavey said.
