Uganda To Decide On Heritage Tax Arbitration In 2 Weeks-Official

29th Jul 2010 11:42

KAMPALA, Uganda (Dow Jones)--The Ugandan government in the next two weeks will decide whether to refer a tax dispute with Heritage Oil PLC (HOIL.LN) to international arbitration or to local courts, the junior minister of Energy and Minerals Development told Dow Jones Newswires Thursday. Heritage said Tuesday it has completed the sale of its two Uganda oil blocks to Tullow Oil PLC (TLW.LN) for $1.45 billion, a deal delayed by months as Heritage and Ugandan authorities disputed the final tax bill. Junior Minister Peter Lokeris said the matter is now before the country's Attorney General and any decision will be geared towards ensuring that Uganda recovers a total of around $405 million in taxes from the sale. "For us we shall work on the technical advice from the Attorney General and the Uganda Revenue Authority," he said. The dispute may end up being referred to local courts and not London, Lokeris said. The Ugandan government insists that according to its Production Sharing agreement with Heritage, tax matters fall under the Ugandan law and do not require international arbitration. A Heritage spokesman could not comment immediately. Heritage Tuesday said it had deposited $121.58 million with the government, representing 30% of the assessed tax, and the remaining $283.45 million in an escrow account pending an agreement. "Heritage continues to work with government to agree a way forward for the tax dispute to be resolved," the company said. Earlier this month, the Ugandan government conditionally approved the sale pending the resolution of the dispute, although Heritage has suggested that the matter should be referred for arbitration to London, the head of Uganda's tax body advised the Ugandan president against such a move last week. -By Nicholas Bariyo, contributing to Dow Jones Newswires; 256-75-2624615 [email protected] (END) Dow Jones Newswires July 29, 2010 06:42 ET (10:42 GMT)