Woodside challenges Senegal’s tax increment in court

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By Biran Gaye

Australian oil company Woodside has filed a legal action against Senegal’s government at the Dakar High Court, challenging the abrupt tax increment by the West African country’s General Directorate of Taxes and Estates (DGID).

Following a tax adjustment, the tax authority demandedWoodside to pay the sum of 41.467 billion CFA francs as tax, reports say.

In response, the operator of the Sangomar oil field filed a suit contesting the decision of the Senegalese tax authorities, a Woodside spokesperson confirmed this information to the Reuters agency.

According to news reports, the spokesperson did not confirm the amount claimed.

Woodside, developer of the Sangomar oil field, challenges the amount involved pitting itself against the Senegalese tax authorities.

Reports added that Woodside Energy Senegal is subject to a tax adjustment of 41.467 billion FCFA as notified, after a procedure, by letter number 00005517/MFB/DGID/DGE/BRG dated June 12, 2024 issued by the Head of the Recovery Division of the General Directorate of Taxes and Estates.

Woodside disputes the amounts in question even though the overall sum, targeted by the first adjustment before confirmation, far exceeded 42.467 billion FCFA.

According to Libération, the oil company has served the tax authorities with a summons opposition which will appear before the court in the first half of August.

Cairn Energy, which had discovered oil at Sangomar, had sold its stake to Woodside. Before leaving the country, it collected at least $525 million and another $100 million in contingent payments, according to reportssue.

In July, Senegalese President BassirouDiomaye Faye, who was elected in March, said the West African country would renegotiate oil contracts to get more benefits for its resources.