Martin Mbogo, Tullow Kenya’s country manager. London-listed energy firm Tullow has disclosed that it paid a total of Sh3.8 billion in taxes to the Kenyan government last year, which is double the amount that the oil explorer remitted in 2013. PHOTO | FILE
What you need to know:
European Union demands that all firms in the extractive sector publish payments made to governments in order to help citizens hold oil firms and governments to account.
Tullow, which has set aside Sh9.1 billion for use in Kenya this year, is scaling up its operations with the planned construction of a mega logistics centre capable of holding approximately 1,200 workers.
London-listed energy firm Tullow has disclosed that it paid a total of Sh3.8 billion in taxes to the Kenyan government last year, which is double the amount that the oil explorer remitted in 2013.
The payments, which came on the back of increased exploratory and appraisal activities in northern Kenya, are revealed in Tullow’s annual report for 2014.
Tullow has stepped up its exploratory work (and more recently appraisal activities) in northern Kenya spurred on by a series of positive finds since it first struck oil in 2012.
“The taxes reflect a high level of work activity, with 2014 being very active year for Tullow Kenya, where we procured a number of services to support our ongoing exploration and well appraisal programme,” said Martin Mbogo, Tullow Kenya’s country manager.
The payout includes value added tax (Sh18.1 million) licence fees, withholding tax on imported services (Sh1.64 billion), pay-as-you-earn (PAYE) on workers’ salaries (Sh1.94 billion) and custom duties (Sh74.8 million).
Tullow also paid Sh29.3 million in training allowances to government staff and national oil firms, Sh14.5 million in licence fees and Sh67 million in infrastructure improvement payments.
The European Union demands that all firms in the extractive sector publish payments made to governments in order to help citizens hold oil firms and governments to account.
The law became operational on January 1 this year, but Tullow has been disclosing the payments since 2013.
“All of the payments disclosed in accordance with the directive have been made to national governments, either directly or through a ministry or department of the national government with the exception of Ghana payments,” Tullow notes in its report.
Tullow, which has set aside Sh9.1 billion for use in Kenya this year, is scaling up its operations with the planned construction of a mega logistics centre capable of holding approximately 1,200 workers.
The new camp will be built a 426 acre parcel of land leased from Turkana locals in Kapese, which is seven kilometres from Lokichar— one of regions where Tullow struck oil.
The decision by Tullow to invest in this site is critical since it contains blocks which hold the Amosing and Ngamia wells, two locations where the company has struck oil.
The investment comes at a time when Tullow is entering the next stage of its operations— extended exploration and appraisal phase—, signalling a higher taxes payout.
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Note: The results are not exact but very close to the actual.
