Galp contests $175.9 million tax claim in Mozambique

A Maputo Tax Court has begun hearing a major legal dispute between the Portuguese oil company Galp and the Mozambican Tax Authority (AT). The case concerns a tax claim of approximately $175.9 million (roughly €151.5 million) regarding capital gains derived from the sale of Galp’s interest in Area 4 of the Rovuma Basin.

The dispute stems from Galp’s sale of its 10% stake in the Rovuma gas projects—which include Coral Sul, Coral Norte, and Rovuma LNG—to the Abu Dhabi National Oil Company (ADNOC). While Galp received $881 million from the transaction, the company is contesting the tax amount calculated by the Mozambican authorities, arguing it is excessive.

Preliminary hearings involving the presentation of evidence were recently held to determine if the tax was calculated in accordance with Mozambican law. This domestic litigation is occurring alongside an international arbitration process initiated by Galp, creating a situation of lis pendens where the same matter is being addressed in multiple judicial venues.