The President of the Republic, Daniel Chapo, stated that “dialogue is the way” to resolve the dispute between Galp and the Mozambican Tax Authority (AT), related to the Portuguese oil company’s sale of its stake in the Area 4 consortium in the Rovuma Basin, according to the Mozambican News Agency.
The dispute arose after Galp sold its position in the natural gas project to ADNOC, the state-owned company of the United Arab Emirates, for €1.2 billion last year.
According to AT calculations, the transaction generated a taxable capital gain of €162 million, based on the application of the 17.6% legal rate. Galp, however, considers that the fair capital gain amounts to only €26 million.
Facing this disagreement, Galp submitted the case to international arbitration at the International Centre for Settlement of Investment Disputes (ICSID) of the World Bank.
On the sidelines of the 6th Portugal-Mozambique Summit, held at the Palácio da Bolsa in Porto, Daniel Chapo stated that the government wants the parties to reach a negotiated solution. “We are in dialogue. I believe we will find a solution. We are two brotherly countries, and as brotherly countries, dialogue is the way to resolve differences,” he said.
The head of state recalled that his mandate has consistently advocated dialogue, referring to the creation of the political commitment law for inclusive national dialogue. “It is the same philosophy we want to apply in the Galp case,” he added.
The President also assured that “without any doubt, a solution will be found,” noting that resolving the dispute will allow the continued development of Portuguese projects in Mozambique and Mozambican projects in Portugal.
