Africa-Press – Mozambique. Mozambican President Daniel Chapo believes that dialogue is fundamental in order to solve the dispute between the Portuguese oil company, Galp, and the Mozambican Tax Authority (AT).
The dispute emerged when Galp decided to sell, over the last year, its position in the consortium exploiting natural gas in Area Four of the Rovuma basin, off the coast of the northern province of Cabo Delgado, to ADNOC, the state-owned oil company of the United Arab Emirates.
The dispute emerged when Galp decided to sell, over the last year, its position in the consortium exploiting natural gas in Area Four of the Rovuma basin, off the coast of the northern province of Cabo Delgado, to ADNOC, the state-owned oil company of the United Arab Emirates.
Galp sold its assets in Mozambique for 1.2 billion Euros (1.3 billion US dollars, at the current exchange rate). This amount, according to the AT’s calculations, results in a taxable capital gain of 162 million Euros (based on the application of the standard 17.6 per cent rate). However, Galp claims that the fair capital gain only corresponds to 26 million Euros.
Galp even decided to take the case to international arbitration, through the World Bank’s International Centre for Settlement of Investment Disputes (ICSID).
According to Chapo, who was speaking on the sidelines of the VI Portugal-Mozambique summit, held at the Palácio da Bolsa in northern Portuguese city of Porto, his government calls for dialogue between the parts in order to solve the dispute.
“We are in dialogue, aren’t we? And I think we will find some solution. We are two brotherly countries and, being two brotherly countries, dialogue is the right way to resolve differences”, he said.
Chapo claims that as Mozambican President he has always defended dialogue as the solution, “that is why we worked to create a law of political commitment for inclusive national dialogue, in which Mozambicans are currently dialoguing to find solutions so that situations that always appear cyclically during electoral processes do not happen again.”
“This is the same philosophy we want to use in GALP issue”, he added. The President guaranteed that “without any doubt, a solution will be found.”
“We will overcome the situation and, based on that, continue to develop Mozambican projects in Portugal and Portuguese projects in Mozambique, so that we can continue to work and create better living conditions for the Mozambican and Portuguese people”, he said
