Hess Corp, Equatorial Guinea Agree on $220m Tax Settlement

By Modupe Gbadeyanka

An agreement has been reached between the Ministry of Mines and Hydrocarbons of Equatorial Guinea and Hess Corporation as well as its license partners on a $220 million settlement on tax issues related to the companies’ interests in two producing oilfields, Ceiba and Okume.

The deal between the government and the partners is the result of negotiations over recent months between the Ministry of Mines and Hydrocarbons and the management of Hess.

The resolution of tax issues clears the way for Hess’ sale of its 85-percent interest in the assets to Kosmos Energy, and for increased involvement by Tullow Oil (a 15-percent interest holder in Ceiba and Okume) in Equatorial Guinea’s petroleum sector. This settlement demonstrates Equatorial Guinea’s commitment to profitable partnerships with international energy companies.

Minister of Mines and Hydrocarbons, Mr Gabriel Mbaga Obiang Lima, remarked that, “Equatorial Guinea has a stellar record in honouring the sanctity of contracts.

“It is in the best interest of the petroleum sector, our nation and its people that we reach fair agreements on financial matters quickly and in a positive way with international partners.

“Hess has been a key leader in the oil and gas industry and instrumental to the country’s growth over the long term. We are pleased the companies worked with us to revolve this situation amicably.”

Hess opened its Equatorial Guinea office in 2001 and Tullow entered the country in 2004 through its acquisition of Energy Africa.

The Ceiba oilfield has been producing since 2000 and the Okume Complex has been in production since 2006. Hess is the operator of the two blocks and national oil company GEPetrol has a carried interest of 5 percent.

Modupe Gbadeyanka is a fast-rising journalist with Business Post Nigeria. Her passion for journalism is amazing. She is willing to learn more with a view to becoming one of the best pen-pushers in Nigeria. Her role models are the duo of CNN's Richard Quest and Christiane Amanpour.

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